Kim Kerrone, of Island Health, described how the vested methodology broke the impasse. (2) Upon accrual of any payment or other benefit under such a multi-year contract to any subcontractor, supplier, or vendor company participating in such contract, such payment or benefit shall be delivered to such company in the most expeditious manner practicable. The extent to which cancellation terms are used in multi-year contracts will depend on the unique circumstances of each contract. Participation by subcontractors, suppliers, and vendors. CLC 222 Mod 4 Contract Monitoring Exam.docx, CLC 222 Module 4 Exam Contract Monitoring - Performance.docx, CLC 222 Module 6 Exam Special Considerations.docx, Contract Monitoring - Performance Exam - 1st Attempt.pdf, The service contract act was enacted to protect economies in the geographical areas where the contract is performed. Few companies will want to risk an expensive court case for breaching the guiding principles; thus the contract becomes a deterrent against counterproductive behavior. This method may be used in sealed bidding or contracting by negotiation. Nondefense agency that is an element of the intelligence community means the agencies identified in 50 U.S.C. You also have an on-premises Active Directory domain that contains a user named User1. (a) Multi-year contracting; (c) Leader company contracting. It is crucial that all terms and conditions of the formal relational contract are aligned with the guiding principles. A contract is a binding agreement between a buyer and a seller. Exam (elaborations) - Clc 222 mod 5 contract monitoring: documentation & handling issues exam 5. This subpart implements 41 U.S.C. (c) Further, the rule revises procurement . (a) Management and operating contracts shall not be authorized for-. The primary goal of Step 1 is to establish a partnership mentality. Broadening the competitive base with opportunity for participation by firms not otherwise willing or able to compete for lesser quantities, particularly in cases involving high startup costs. Termination-for-convenience clauses create perverse incentives for suppliers to not invest in buyer relationships. The written determination shall identify the acquisition categories to which the waiver applies. (c) A provision that, if the Government determines before award that only the first program year requirements are needed, the Governments evaluation of the price or estimated cost and fee shall consider only the firstyear. Annual and multi-year proposals. Cancellation ceiling means the maximum cancellation charge that the contractor can receive in the event of cancellation. (2) An agency uses another agency to provide acquisition assistance, such as awarding and administering a contract, a task order, or delivery order. The model also gave the hospitalists autonomy in scheduling. This subpart prescribes policies and procedures for the use of option solicitation provisions and contract clauses. Exam (elaborations) - Clc 222 mod 3 contract management exam 4. It is a description of a task, subtask, activity, and/or deliverable; and reflects corresponding pricing assumptions proposed and accepted by the client. For nearly a decade, FedEx met all its contractual obligationsbut neither party was happy in the relationship. $150 million Cash flow is easier to predict in a lump sum contract. Each was crafted to establish a new norm for the partnership. 3501 For sealed bids, the determination shall be in writing. However, it does not preclude the use of options in those contracts. (2) If approved by the servicing agency, payment for actual costs may be made by the requesting agency after the supplies or services have been furnished. (c) Information on such committees may not be readily available to contracting officers. (c) The period shall be set so as to provide the contractor adequate lead time to ensure continuous production. (g) Contracts may express extensions of the term of the contract as an amended completion date or as additional time for performance; e.g., days, weeks, or months. (2) Orders of $600,000 or less issued against Federal Supply Schedules. As contrasted with cancellation, termination can be effected at any time during the life of the contract (cancellation is effected between fiscal years) and can be for the total quantity or partial quantity (where as cancellation must be for all subsequent fiscal years quantities). (g) Level unit prices. Economists call this the hold-up problem: the fear that one party will be held up by the other. (The DFARS, DoD class deviations, and PGI are accessible at: http://www.acq.osd.mil/dpap/dars). (c) Cancellation procedures. Providing incentives to contractors to improve productivity through investment in capital facilities, equipment, and advanced technology. If it is anticipated that the best price available is the option price or that this is the more advantageous offer, the contracting officer should not use this method of testing the market. If funds are not appropriated to support the succeeding years requirements, the agency must cancel the contract. (c) Replacement of an incumbent contractor is usually based largely upon expectation of meaningful improvement in performance or cost. (d) Substantial continuity of production or performance, thus avoiding annual startup costs, preproduction testing costs, make-ready expenses, and phaseout costs. The total estimate of the above costs must then be compared with the best estimate of the contract cost to arrive at a reasonable percentage or dollar figure. Exam (elaborations) - Clc 222 mod 6 special considerations exam 2. Multi-year contract procedures provide for the amortization of certain costs over the entire contract quantity resulting in identical (level) unit prices (except when the economic price adjustment terms apply) for all items or services under the multi-year contract. (h) Providing incentives to contractors to improve productivity through investment in capital facilities, equipment, and advanced technology. Written contracts that are legally enforceable (which is why we call them formal), they include many components of a traditional contract but also contain relationship-building elements such as a shared vision, guiding principles, and robust governance structures to keep the parties expectations and interests aligned. (3) Follower company, obligating it to subcontract with a designated leader company for the required assistance. The contract also specifies a second governance mechanisma two in a box communication approach in which an administrator is teamed with a hospitalist for each of the four governance teams. (a) They shall not include any costs of labor or materials, or other expenses (except as indicated above), which might be incurred for performance of subsequent program year requirements. Type of contract. They are especially useful for complex purchasing arrangements, outsourcing, strategic alliances, joint ventures, franchises, public-private partnerships, large construction projects, and collective bargaining agreements. The minimum need to be purchased is expected to remain substantially unchanged during the contemplated contract period in terms of production rate, procurement rate, and total quantities; (3) The review should determine whether meaningful improvement in performance or cost might reasonably be achieved. Some methods of contracting require more time than others. They should analyze their dependency on the particular supplier, the strategic value of its product, and the impact of nonperformance on a buyers operations. Relational contracts that rely on parties making choices in their mutual self-interest are nothing new, of course. (e) Insert a clause substantially the same as the clause at 52.217-7, Option for Increased Quantity-Separately Priced Line Item, in solicitations and contracts, other than those for services, when the inclusion of an option is appropriate (see 17.200 and 17.202) and the option quantity is identified as a separately priced line item having the same nomenclature as a corresponding line item. (h) This wide selection of contract types is available to the government and contractors to provide flexibility in acquiring the large variety and volume of supplies and services required by agencies. (4) The contracting officer has determined that there is a reasonable likelihood that the option will be exercised. There is a reasonable expectation that, throughout the contemplated contract period, the head of the agency will request funding for the contract at a level to avoid contract cancellation; and. (a) In awarding the basic contract, the contracting officer shall, except as provided in paragraph (b) of this section, evaluate offers for any option quantities or periods contained in a solicitation when it has been determined prior to soliciting offers that the Government is likely to exercise the options. When Dell originally selected FedEx, in 2005, to handle all aspects of its hardware return-and-repair process, the companies drew up a traditional supplier contract. For example, Island Health never shared the budget with the hospitalists. (i) State that use of an interagency acquisition is in the best interest of the Government; (ii) State that the supplies or services cannot be obtained as conveniently or economically by contracting directly with a private source; and. (e) Waiver. The need for the supplies or services is reasonably firm and continuing over the period of the contract; and. (1) Consider strategies for the effective participation of small businesses during acquisition planning (see 7.103(u)); (2) Detail the administration of such contract, including an analysis of all direct and indirect costs to the Government of awarding and administering such contract; (3) Describe the impact such contract will have on the ability of the Government to leverage its purchasing power, e.g., will it have a negative effect because it dilutes other existing contracts; (4) Include an analysis concluding that there is a need for establishing the multi-agency contract; and. (2) In determining cancellation ceilings, the contracting officer must estimate reasonable preproduction or startup, labor learning, and other nonrecurring costs to be incurred by an "average" prime contractor or subcontractor, which would be applicable to, and which normally would be amortized over, the items or services to be furnished under the multi-year requirements. These limitations do not apply to information technology contracts. In two-step sealed bidding, discussions conducted during the first step may indicate the need for revised ceilings and dates which may be incorporated in step two. A sole source procurement (called an Other than Full & Open Competition) is when the government enters into a contract with a contractor without going through the typical competitive process as required by law because it deems that the contractor is the only source available that can meet the government requirements. (b) For DoD, NASA, and the Coast Guard, a multi-year contract which includes a cancellation ceiling in excess of $150 million may not be awarded until the head of the agency gives written notification of the proposed contract and of the proposed cancellation ceiling for that contract to the committees on armed services and appropriations of the House of Representatives and Senate. (2) Fails to notify the contractor that funds are available for performance of the succeeding program year requirement. By the eighth year, the parties were at the breaking point. 10) Some methods of contracting require more time than others. (a) When exercising an option, the contracting officer shall provide written notice to the contractor within the time period specified in the contract. These include complicated outsourcing and purchasing arrangements, strategic alliances, joint ventures, franchises, public-private partnerships, major construction projects, and collective bargaining agreements. (b) The head of a contracting activity may authorize the use of a solicitation requesting only multi-year prices, provided it is found that such a solicitation is in the Governments interest, and that dual proposals are not necessary to meet the objectives in 17.105-2. 10) Some methods of contracting require more time than others. Buyers are crazy to expect us to invest in innovation if they do the math.. Dell felt that FedEx was not proactive in driving continuous improvement and innovative solutions; FedEx was frustrated by onerous requirements that wasted resources and forced it to operate within a restrictive statement of work. The six principlesreciprocity, autonomy, honesty, loyalty, equity, and integrityform the basis for all contracts using the vested methodology and provide a framework for resolving potential misalignments when unforeseen circumstances occur. South Island has the opportunity to earn incentives if they improve efficiency and billing, which they can invest in research and quality-of-care initiatives they are passionate about. In a subsequent workshop the team delved deeper, crafting four high-level desired outcomes, seven goals, and 22 tactical and measurable objectives. Accordingly, agencies should provide such information through its internal regulations. Issuing RFI. Formal relational contracts will never completely replace traditional transactional contracts. A procurement contract includes: Product or service selection. (d) Insert a clause substantially the same as the clause at 52.217-6, Option for Increased Quantity, in solicitations and contracts, other than those for services, when the inclusion of an option is appropriate (see 17.200 and 17.202) and the option quantity is expressed as a percentage of the basic contract quantity or as an additional quantity of a specific line item. Course Hero is not sponsored or endorsed by any college or university. And in a publicly funded health care environment, that is exactly what we need to be focusing on., The governance structure also helped the parties surmount the tricky problem of scope creep. (b) Protection of existing authority. Which of the following is, [Identify the various methods of contracting for, Ordering off a Blanket Purchase Agreement, Buys against a GSA Federal Supply Schedule. The primary contracting methods used by the government are: micro-purchases; simplified acquisition procedures; sealed bidding; contract by negotiations; and, consolidated purchasing programs, such as the use of GSA schedules, Government Wide Acquisition Contracts and other multiple award vehicles. Six of the most common project delivery methods in construction are Design-Bid-Build (D-B-B), Design-Build (D-B), Construction Manager at Risk (CMAR), Construction Management Multi-Prime (CMMP), Public-Private Partnership (PPP or P3), and Integrated Project Delivery (IPD). Dells cost of switching to another company would be high, and FedEx would have trouble replacing the revenue and profits the contract generated. Except for DoD, NASA, and the Coast Guard, the contracting officer may enter into a multi-year contract if the head of the contracting activity determines that-, (1) Nondefense agency contracting officers are responsible for ensuring support provided in response to DoDs request complies with paragraph (b) of this section. Having set the foundation for the relationship in the first three steps, parties hammer out the terms of the dealfor example, responsibilities, pricing, and metrics. Use of multi-year contracting is encouraged to take advantage of one or more of the following: (b) Enhancement of standardization. (3) Because private enterprise is unable or unwilling to use its own facilities for the work. (a) One objective, for example, called for improving physicians billing to the provincial Medical Services Plan (MSP) for cost recovery for the hospitalist fees. (3) The time between the award of the contract containing the option and the exercise of the option is so short that it indicates the option price is the lowest price obtainable or the more advantageous offer. When the period of production is likely to warrant a labor and material costs contingency in the contract price, the contracting officer should normally use an economic price adjustment clause (see 16.203). Cancellation results when the contracting officer-, (1) Notifies the contractor of nonavailability of funds for contract performance for any subsequent program year; or. Any contract between two or more parties to deliver services or goods is a procurement contract. Department of Defense (DoD) acquisition official means-. (d) The work is closely related to the agencys mission and is of a long-term or continuing nature, and there is a need-, (1) To ensure its continuity; and. To satisfy requirements of part 6 regarding full and open competition, the option must have been evaluated as part of the initial competition and be exercisable at an amount specified in or reasonably determinable from the terms of the basic contract, e.g.-. A provision specifying a separate cancellation ceiling (on a percentage or dollar basis) and dates applicable to each program year subject to a cancellation (see 17.106-1(c) and (d)). The contracting officer shall reduce the cancellation ceiling for each program year in direct proportion to the remaining requirements subject to cancellation. Leader company contracting is an extraordinary acquisition technique that is limited to special circumstances and utilized only when its use is in accordance with agency procedures. (2) An informal analysis of prices or an examination of the market indicates that the option price is better than prices available in the market or that the option is the more advantageous offer. If level unit pricing is not in the Governments interest, the head of a contracting activity may approve the use of variable unit prices, provided that for competitive proposals there is a valid method of evaluation. repairs. (See 17.208.). In order to establish a multi-agency or governmentwide acquisition contract, a business-case analysis must be prepared by the servicing agency and approved in accordance with the OFPP business case guidance, available at https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/procurement/memo/development-review-and-approval-of-business-cases-for-certain-interagency-and-agency-specific-acquisitions-memo.pdf . (1) The option cannot be evaluated under 17.206; or; (2) Future competition for the option is impracticable. May modify the clause at 52.222-43 in overseas contracts when laws, regulations, or international agreements require contractors to pay higher wage rates; or. (f) Nondefense agency certifications, waivers, and additional information are available at http://www.acq.osd.mil/dpap/cpic/cp/interagency_acquisition.html. Termination payment. Some methods of contracting require more time than others. may not be awarded until the head of the agency gives written notification of the proposed contract and of the proposed cancellation ceiling for that contract to the committees on appropriations of the House of Representatives and Senate and the appropriate oversight committees of the House and Senate for the agency in question. (c) Agency funding of multi-year contracts shall conform to the policies in OMB Circulars A-11 (Preparation and Submission of Budget Estimates) and A-34 (Instructions on Budget Execution) and other applicable guidance regarding the funding of multi-year contracts. Avoidance of the need for establishing quality control techniques and procedures for a new contractor each year. (a) The contract shall specify limits on the purchase of additional supplies or services, or the overall duration of the term of the contract, including any extension. (See 17.207(f) with regard to the exercise of options. (3) A specified limitation on the total duration of the contract. Which of the following is not a streamlined method of acquisition? To date, 57 companies have employed the vested methodology. Looking for U.S. government information and services? (a) Except for DoD, NASA, and the Coast Guard, the contracting officer may enter into a multi-year contract if the head of the contracting activity determines that-, (1) The need for the supplies or services is reasonably firm and continuing over the period of the contract; and. The contracting officer shall insert the amount for the first program year in the contract upon award and modify it for successive program years upon availability of funds. Shall add the clause at 52.222-43, Fair Labor Standards Act and Service Contract Labor Standards- Price Adjustment (Multiple Year and Option Contracts), when the contract includes the clause at 52.222-41, Service Contract Labor Standards; (2) (c) This subpart does not apply to-, (1) Interagency reimbursable work performed by Federal employees (other than acquisition assistance), or interagency activities where contracting is incidental to the purpose of the transaction; or. (a) Written agreement on responsibility for management and administration. Substantial continuity of production or performance, thus avoiding annual startup costs, preproduction testing costs, make-ready expenses, and phaseout costs. In this step, contracting parties go beyond crafting the terms of the agreement and establish governance mechanisms that are formally embedded in the contract. Again, its important to note that these guiding principles have teeth. The parties created a joint project collaboratively working with billing support and IT technologists to develop an electronic billing program to maximize billing submissions, ultimately improving cost recovery from 87% to 100%.
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