some methods of contracting require more time than others

They often undermine the partnerlike relationships and trust needed to cope with external uncertainty. This method may be used in sealed bidding or contracting by negotiation. (5) A specific price that is subject to change as the result of changes to prevailing labor rates provided by the Secretary of Labor. And if their previous contracting process led to distrust and a vicious cycle of shading, they should reflect on how and why that happened. (1) Percentage of specific line items, (2) Increase in specific line items; or. (b) Solicitations containing option provisions shall state the basis of evaluation, either exclusive or inclusive of the option and, when appropriate, shall inform offerors that it is anticipated that the Government may exercise the option at time of award. 2) What is a KEY role of the COR in Acquisition Planning? (d) The contracting officer, after considering price and other factors, shall make the determination on the basis of one of the following: (1) A new solicitation fails to produce a better price or a more advantageous offer than that offered by the option. (d) Solicitations that allow the offer of options at unit prices which differ from the unit prices for the basic requirement shall state that offerors may offer varying prices for options, depending on the quantities actually ordered and the dates when ordered. 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. Island Health and South Island formally embedded their interpretations of the principles in the preamble of their contract. (2) Which of the following is NOT, [Recognize how contract types impacts COR responsibilities], Cost reimbursement contracts require less monitoring by the COR than other. A version of this article appeared in the, Cecil Touchon/Courtesy of Sears-Peyton Gallery, New York, CECIL TOUCHON/COURTESY OF SEARS-PEYTON GALLERY, NEW YORK, Note: This table is based on material presented in, From the Magazine (SeptemberOctober 2019). (a)Multi-year contracting is a special contracting method to acquire known requirements in quantities and total cost not over planned requirements for up to 5 years unless otherwise authorized by statute, even though the total funds ultimately to be obligated may not be available at the time of contract award. Early research by one of us (Oliver, who won the 2016 Nobel Prize in economics for his work on contracts) predicted that in response to the combined problems of hold-ups and incomplete contracts, companies are very likely to make distorted investments that produce poor outcomes. One objective, for example, called for improving physicians billing to the provincial Medical Services Plan (MSP) for cost recovery for the hospitalist fees. A growing number of large organizationssuch as the Canadian government, Dell, Intel, AstraZeneca, and the Swedish telecommunications firm Teliaare successfully using this approach. Formal relational contracts are built on a foundation of trust and are shaped by a shared vision and six universal guiding principles. So the sustainability team came up with a pilot project to address how to fairly add the additional scope of work and new role for health care providers to the hospitalists schedule and pricing model. The contracting officer shall include these dates in the schedule, as appropriate. (ii) Delivery requirements far enough into the future to permit competitive acquisition, production, and delivery. (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 termination for convenience procedure may apply to any Government contract, including multiyear contracts. (b) Since issuance of an authorization under 17.602(a) is deemed sufficient proof of compliance with paragraph (a) immediately above, nothing in paragraph (a) immediately above shall affect the validity or legality of such an authorization. (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. This method is most advantageous for relatively straightforward and small projects such as: renovations. Accordingly, for multi-year contracts, the agency head may authorize modification of the requirements of this subpart and the clause at 52.217-2, Cancellation Under Multi-year Contracts. Ceilings must exclude amounts for requirements included in prior program years. (b) (b) The contracting officer need not evaluate offers for any option quantities when it is determined that evaluation would not be in the best interests of the Government and this determination is approved at a level above the contracting officer. For example, Spencer Cleave, a hospitalist from South Island, and Kim Kerrone, Island Healths vice president for finance, legal, and risk, led a small group focused on rethinking the conventional fee-for-billable-service-hour payment structure. If a third party is proposed, consent of the third party should be obtained in writing. The formal relational contract addresses these deficiencies. 10 U.S.C. (b) A nondefense agency is compliant with applicable procurement requirements if the procurement policies, procedures, and internal controls of the nondefense agency applicable to the procurement of supplies and services on behalf of DoD, and the manner in which they are administered, are adequate to ensure the compliance of the nondefense department or agency with-, (1) The Federal Acquisition Regulation and other laws and regulations that apply to procurements of supplies and services by Federal agencies; and. (f) Solicitations may, in unusual circumstances, require that options be offered at prices no higher than those for the initial requirement; e.g., when-. They agonize over every conceivable scenario and then try to put everything in black-and-white. 3201 note prec.). (e) A statement that award will not be made on less than the first program year requirements. Recurring costs means costs that vary with the quantity being produced, such as labor and materials. Together, we are a team that celebrates and advances excellence in care for our patients and ourselves through shared responsibility, collaborative innovation, mutual understanding, and the courage to act, in a safe and supportive environment. (B) The servicing agency has the capability or expertise to enter into a contract for such supplies or services that is not available within the requesting agency. (1) The solicitation contains an option clause; (2) An option is not to be exercised at the time of contract award; (3) A firm-fixed-price contract, a fixed-price contract with economic price adjustment, or other type of contract approved under agency procedures is contemplated; and. Value-eroding friction and shading occur because one or both parties feel unfairly treated. However, if the servicing agency is not subject to the Federal Acquisition Regulation, the requesting agency shall verify that contracts utilized to meet its requirements contain provisions protecting the Government from inappropriate charges (for example, provisions mandated for FAR agencies by part 31), and that adequate contract administration will be provided. In 2008, Oliver, together with economic theorist John Moore, revisited his work on contracts. An official website of the General Services Administration. All program years except the first are subject to cancellation. In Step 3, parties commit to six guiding principles that contractually prohibit opportunistic tit-for-tat moves. Contracts awarded under the multi-year procedure shall be firm-fixed-price, fixed-price with economic price adjustment, or fixed-price incentive. Each of these contract types is suitable for some projects and not others, and each has both advantages and disadvantages for the various stakeholders . In unusual circumstances, an authorized person at a level above the contracting officer may approve a greater percentage of quantity. (d) Substantial continuity of production or performance, thus avoiding annual startup costs, preproduction testing costs, make-ready expenses, and phaseout costs. 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. (c) Cancellation procedures. Given the longer performance period associated with multi-year acquisition, consideration in pricing fixed-priced contracts should be given to the use of economic price adjustment terms and profit objectives commensurate with contractor risk and financing arrangements. (1) All program years except the first are subject to cancellation. Cancellation charge means the amount of unrecovered costs which would have been recouped through amortization over the full term of the contract, including the term canceled. From the following statements, select the correct statement pertaining to the, Personnel services contracts are authorized by the government When? 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. (a) The Economy Act ( 31 U.S.C.1535) authorizes agencies to enter into agreements to obtain supplies or services from another agency. Information on such committees may not be readily available to contracting officers. (b) Criteria for comparing the lowest evaluated submission on the first program year requirements to the lowest evaluated submission on the multi-year requirements. Fixed-price contracts, also known as firm-price or lump-sum contracts, are agreements in which the two parties state the goods or services one party will provide and establish the price the other party will pay for them. $15 million Multi-year contract including the requirements for each program year. (a) When exercising an option, the contracting officer shall provide written notice to the contractor within the time period specified in the contract. (h) It is key to the buyer and seller relationship and provides a framework to deal with each other. Accordingly, for multi-year contracts, the agency head may authorize modification of the requirements of this subpart and the clause at 52.217-2, Cancellation Under Multi-year Contracts. (5) Acquisition authority as may be appropriate (see 17.503(d)). As provided by that guidance, the funds obligated for multi-year contracts must be sufficient to cover any potential cancellation and/or termination costs; and multi-year contracts for the acquisition of fixed assets should be fully funded or funded in stages that are economically or programmatically viable. (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. The nature of the requirement should govern the selection of the method of contracting, since the multi-year procedure is compatible with sealed bidding, including two-step sealed bidding, and negotiation. (see The New, Improved Keiretsu, HBR, September 2013). (3) Bills rendered or requests for advance payment shall not be subject to audit or certification in advance of payment. (f) Insert a clause substantially the same as the clause at 52.217-8, Option to Extend Services, in solicitations and contracts for services when the inclusion of an option is appropriate. Economic price adjustment clauses are adaptable to multi-year contracting needs. The contract may not be awarded until the thirty-firstday after the date of notification. (c) Requirements for determinations and findings. 1. (1) The servicing agency may ask the requesting agency, in writing, for advance payment for all or part of the estimated cost of furnishing the supplies or services. Cancellation ceilings and dates may be revised after issuing the solicitation if necessary. The contract may not be awarded until the thirty-firstday after the date of notification. The contracting officer shall insert the clause at 52.217-2, Cancellation Under Multi-year Contracts, in solicitations and contracts when a multi-year contract is contemplated. This is necessary for situations when exercise of the option would result in the obligation of funds that are not available in the fiscal year in which the contract would otherwise be completed. https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/assets/OMB/procurement/interagency_acq/iac_revised.pdf, 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, http://www.acq.osd.mil/dpap/cpic/cp/interagency_acquisition.html, Civilian Agency Acquisition Council (CAAC), Interagency Suspension and Debarment Committee (ISDC). (e) Waiver. Always have a copy of the contract, price assumptions, budgets, scope baseline, and other related documents nearby. Standard forms can also be useful if the same parties are involved on repeat projects. When using sealed bidding, the contracting officer shall make a written determination that there is a reasonable likelihood that the options will be exercised before including the provision at 52.217-5, Evaluation of Options, in the solicitation. The contracting officer shall limit the Governments payment obligation to an amount available for contract performance. Formal relational contracts will never completely replace traditional transactional contracts. contracting officers shall avoid, to the maximum extent practicable, using the lowest price technically acceptable source selection process in the case of a procurement that is predominantly for the acquisition of (1)Information technology services, cybersecurity services, systems engineering and technical Ceilings must exclude amounts for requirements included in prior program years. (2) (1) Each individual worked with a counterpart from the other organization to establish connections in key areas. (1) The contractor will incur undue risks; e.g., the price or availability of necessary materials or labor is not reasonably foreseeable; (2) Market prices for the supplies or services involved are likely to change substantially; or, (3) The option represents known firm requirements for which funds are available unless-, (i) The basic quantity is a learning or testing quantity; and. (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. (b) Economic price adjustment clauses. 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. In order to broaden the defense industrial base, to the maximum extent practicable-, (1) (e) If it is anticipated that the Government may exercise an option at the time of award and if the condition specified in paragraph (d) of this section applies, solicitations shall specify the price at which the Government will evaluate the option (highest option price offered or option price for specified requirements). (e) Does the buyer benefit from access to the suppliers criticalsystems and processes (and vice versa)? 11302(e) for Governmentwide acquisition contracts (GWACs). $150 million Kim Kerrone, of Island Health, described how the vested methodology broke the impasse. Remediation Accessed shows whether you accessed those links. Consider how the Island Health administrators and South Island hospitalists tackled pricing, which had always been their sticking point. false. (c) Management and operating contract means an agreement under which the Government contracts for the operation, maintenance, or support, on its behalf, of a Government-owned or -controlled research, development, special production, or testing establishment wholly or principally devoted to one or more major programs of the contracting Federal agency.

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