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Understanding government contracting terminology
 

Understanding government contracting terminology

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Understanding Federal Contracting. This presentation is not my original work. It is a very good presentation by Aaron C. Sams. I am sure it will be helpful to a lot of people trying to start small ...

Understanding Federal Contracting. This presentation is not my original work. It is a very good presentation by Aaron C. Sams. I am sure it will be helpful to a lot of people trying to start small busniess and win Federal contracting. Thanks to Aaron C. Adams

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    Understanding government contracting terminology Understanding government contracting terminology Presentation Transcript

    • UNDERSTANDING GOVERNMENT CONTRACTING TERMINOLOGY Originally presented by Aaron C. Sams
      • The purpose of this presentation is to provide you with a general understanding of federal contracting terminology in order to equip you with the tools necessary to successfully do business with the government.
      • What is a Contract?
      • A mutually binding legal relationship obligating the seller to furnish the supplies or services (including construction) and the buyer to pay for them.
      • Contracts do not include grants and cooperative agreements
      • Basic Federal Contracting Terms
      • What is the FAR?
      • F ederal A cquisition R egulations
      • These are the principal set of rules that govern what is called the "acquisition process," which is the process through which the government purchases ("acquires") goods and services.
      • Basic Federal Contracting Terms
      • What is a “Contracting officer” (CO/KO)
      • A person with the authority to enter into, administer, and/or terminate contracts and make related determinations and findings.
      • This authority is limited to the amount stated on the contracting officer’s warrant.
      • Basic Federal Contracting Terms
      • What is the “Micro Purchase Threshold?”
      • “ Micro-purchase threshold” means $3,000, except it means—
      • (1) For acquisitions of construction subject to the Davis-Bacon Act, $2,000;
      • (2) For acquisitions of services subject to the Service Contract Act, $2,500;
      • Micro-purchases are predominantly made with a Government Purchase Card (GPC).
      • Basic Federal Contracting Terms
      • What is the “Simplified acquisition threshold?”
      • Simplified Acquisition Threshold is $100,000
      • Each acquisition of supplies or services that has an anticipated dollar value exceeding $3,000 and not exceeding $100,000 is reserved exclusively for small business concerns and shall be set aside.
      • Basic Federal Contracting Terms
      • What is an “Independent Government Estimate?”
      • An Independent Government Cost Estimate is the U.S. Government's own estimated cost/price of the proposed acquisition. Its primary purposes are:
      • *To serve as a basis for comparing costs or prices proposed by offerors; and…
      • *To serve as an objective basis for determining price reasonableness in cases in which one bidder or offeror responds to a solicitation.
      • Basic Federal Contracting Terms
      • What is a “Purchase order?”
      • An offer by the Government to buy supplies or services upon specified terms and conditions, using simplified acquisition procedures.
      • SF 1449 Template
      • (Commercial items, Services)
      • SF 1442 Template
      • (Construction only)
      • Basic Federal Contracting Terms
      • What is a “Delivery Order”/ “Task Order?”
      • An order for supplies placed against an established contract where certain terms and conditions have been pre-negotiated.
      • These are most prominently seen for GSA Schedule holders, and firms awarded IDIQ contracts.
      • DD 1155:
      • Basic Federal Contracting Terms
      • What is a “Modification?”
      • A written order that changes the terms, the prices, or the scope of work of a purchase order. A modification can be …
      • (1) Bilateral- meaning both parties sign the modification, or…
      • (2) Unilateral- in which the contracting officer directs the contractor to make a change within the general scope of the contract
      • SF 30:
      • Basic Federal Contracting Terms
      • What is a “Termination for Convenience?”
      • This refers to the Government’s right to completely or partially terminate performance of work under a contract when it is in the Government’s interest.
      • The contractor is entitled to receive payment for the amount of work performed on the contract.
      • The contractor does not receive an unfavorable past performance rating.
      • Basic Federal Contracting Terms
      • What is a “Termination for Cause?”
      • This refers to the Government’s right to completely or partially terminate performance of work under a contract for commercial items or services when the contractor is negligent.
      • Contractor may or may not be entitled to receive payment for the amount of work performed on the contract. The contractor does receive an unfavorable past performance rating.
      • Basic Federal Contracting Terms
      • What is a “Termination for Default?”
      • This refers to the Government’s right to completely or partially terminate performance of work under a construction contract when the contractor is negligent.
      • Contractor may or may not be entitled to receive payment for the amount of work performed on the contract. The contractor does receive an unfavorable past performance rating.
      • Basic Federal Contracting Terms
      • What is a Firm-Fixed-Price contract?”
      • A firm-fixed-price contract provides for a price that is not subject to any adjustment on the basis of the contractor’s cost. This contract type places full responsibility upon the contractor to control costs.
      • This contract type is used most frequently when acquiring commercial items, commercial services, and construction.
      • TYPES OF CONTRACTS
      • What is a “Time-and-Materials Contract?”
      • A time-and-materials contract may be used only when it is not possible at the time of placing the contract to estimate accurately the extent or duration of the work or to anticipate costs with any reasonable degree of confidence .
      • A time-and-materials contract provides for acquiring supplies or services on the basis of direct labor hours at specified fixed hourly rates that include wages, overhead, general and administrative expenses, and profit.
      • TYPES OF CONTRACTS
      • What is a “Cost-Reimbursement Contract?”
      • Cost-reimbursement types of contracts provide for payment of allowable incurred costs. These contracts establish an estimate of total cost for the purpose of obligating funds and establishing a ceiling that the contractor may not exceed.
      • Cost-reimbursement contracts are suitable for use only when uncertainties involved in contract performance do not permit costs to be estimated with sufficient accuracy to use any type of fixed-price contract.
      • TYPES OF CONTRACTS
      • What is an IDIQ Contract?”
      • ( I ndefinite D elivery- I ndefinite Q uantity)
      • An indefinite-quantity contract provides for an indefinite quantity, within stated limits, of supplies or services during a fixed period.
      • Contracting officers may use an IDIQ contract when the Government cannot predetermine the precise quantities of supplies or services that the Government will require during the contract period, and it is inadvisable for the Government to commit itself for more than a minimum quantity.
      • TYPES OF CONTRACTS
      • What is a “Letter” Contract?
      • A letter contract may be used when…
      • The Government’s interests demand that the contractor be given a binding commitment so that work can start immediately and…
      • When negotiating a definitive contract is not possible . This contract must be definitive within 180 days after the date of the letter contract or before completion of 40 percent of the work to be performed, whichever occurs first.
      • TYPES OF CONTRACTS
      • What is a “NAICS Code?”
      • ( N orth A merican I ndustry C lassification S ystem)
      • A NAICS code (a six digit number) is a standard used by Federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy.
      • http://www.census.gov/eos/www/naics/
      • Socio-Economic Classifications
      • What is a “Size Standard?”
      • The SBA has established numerical definitions, or "size standards," for all for-profit industries.  Size standards represent the largest size that a business (including its subsidiaries and affiliates) may be to remain classified as a small business concern. 
      • http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf
      • Socio-Economic Classifications
      • What is a “Small Business?”
      • A concern, including its affiliates, that is independently owned and operated, not dominant in the field of operation in which it is bidding on Government contracts, and qualified as a small business under the criteria and size standards set forth in association with its applicable NAICS codes.
      • Socio-Economic Classifications
      • What is a “Women-Owned Small Business Concern?”
      • “ Women-owned small business concern” means a small business concern—
      • (1) That is at least 51 percent owned by one or more women; or, in the case of any publicly owned business, at least 51 percent of the stock of which is owned by one or more women; and...
      • (2) Whose management and daily business operations are controlled by one or more women.
      • Socio-Economic Classifications
      • What is a “Small Disadvantaged Business Concern?”
      • Small businesses that are 51 % owned by members of the following designated groups are presumed to be socially disadvantaged:
      • *Hispanic Americans
      • *Black Americans
      • *Native Americans
      • *Asian Pacific Americans
      • *Etc.,
      • Socio-Economic Classifications
      • What is a “Veteran-owned small business concern?”
      • Veteran-owned small business concern” means a small business concern—
      • (1) Not less than 51 percent of which is owned by one or more veterans or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or more veterans; and..
      • (2) The management and daily business operations of which are controlled by one or more veterans.
      • Socio-Economic Classifications
      • What is a “Service-disabled Veteran-Owned Small Business Concern?”
      • A small business concern—
      • (i)Not less than 51 percent of which is owned by one or more service-disabled veterans or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or more service-disabled veterans; and…
      • (ii) The management and daily business operations of which are controlled by one or more service-disabled veterans or, in the case of a service-disabled veteran with permanent and severe disability, the spouse or permanent caregiver of such veteran.
      • Socio-Economic Classifications
      • What is a “Hubzone?”
      • ( H istorically U nderutilized B usiness)
      • “ HUBZone small business concern” means a small business concern that appears on the List of Qualified HUBZone Small Business Concerns .
      • The HUBZone program provides federal contracting assistance for qualified SBCs located in historically underutilized business zones in an effort to increase employment opportunities, investment, and economic development in such areas.
      • http://map.sba.gov/hubzone/init.asp#address
      • Socio-Economic Classifications
      • What is a “Taxpayer Identification Number (TIN)?”
      • The number required by the IRS to be used by the offeror in reporting income tax and other returns. The TIN may be either a Social Security Number or an Employer Identification Number (Recommended) .
      • h ttps://sa2.www4.irs.gov/modiein/individual/index.jsp
      • Getting Registered
      • What is a DUNS (Data Universal Numbering System) Number?
      • “ Data Universal Numbering System (DUNS) number” means the 9-digit number assigned by Dun and Bradstreet, Inc. (D&B), to identify unique business entities, which is used as the identification number for Federal contractors.
      • *Needed for Registration In CCR*
      • http://fedgov.dnb.com/webform
      • Getting Registered
      • What is CCR (Central Contractor Registration)?
      • www.ccr.gov
      • -CCR is the primary Government repository for contractor information required for the conduct of business with the Government.
      • -Prospective vendors must be registered in CCR prior to the award of a contract; basic agreement, basic ordering agreement, or blanket purchase agreement.
      • -Registrants must update or renew their registration at least once per year to maintain an active status.
      • Getting Registered
      • What is ORCA?
      • O nline R epresentations & C ertifications A pplication
      • http://orca.bpn.gov
      • The primary Government repository for contractor submitted representations and certifications required for the conduct of business with the Government. Registrants must renew their ORCA registration annually in order to remain current.
      • Getting Registered
      • What is Debarment/Suspension?
      • www.epls.gov
      • “ Debarment” means action taken to exclude a contractor from Government contracting and Government-approved subcontracting for a reasonable, specified period.
      • “ Suspension” means action to disqualify a contractor temporarily from Government contracting and Government-approved subcontracting; a contractor that is disqualified is “suspended.”
      • Getting Registered
      • What actions will cause you to be debarred or suspended?
      • -Fraud or a criminal offense in connection with a federal contract
      • -Commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, tax evasion, violating Federal criminal tax laws, etc.
      • - Falsely claiming an item to be “Made in America” when the product was not made in the United States or its outlying areas
      • - Engaging in unethical behavior
      • Getting Registered
      • What is FedBizOpps?
      • www.fbo.gov
      • Referred to as the Government Point of Entry (GPE), it is the single point where Government business opportunities greater than $25,000.
      • Contracting Opportunities can be identified through searching by agency, place of performance, set-asides, and NAICS codes
      • Pre-Award Terms
      • “ What is “Full and Open Competition?”
      • A term indicating that all responsible sources are permitted to compete, including large businesses. The government utilizes full and open competition by promoting competition amongst bidders in order to obtain the best price, and the best product or service.
      • Pre-Award Terms
      • What Is A “Small Business Set-Aside?”
      • A “set-aside for small business” is the reserving of an acquisition exclusively for participation by small business concerns. A small business set-aside may be open to all small businesses.
      • Each acquisition of supplies or services that has an anticipated dollar value exceeding $3,000 , but not over $100,000 is automatically reserved exclusively for small business concerns.
      • Pre-Award Terms
      • What Is A “Sources Sought Notice?”
      • The Sources Sought notice is a synopsis posted by a government agency that states they are seeking possible sources for a project. It is not a solicitation for work, nor is it a request for proposal.
      • The Government uses sources sought notices to identify small businesses when determining whether or not to set-aside an acquisition.
      • Pre-Award Terms
      • What Is A “Pre-Solicitation?”
      • The Contracting officer must synopsize (publicize) a proposed contract action before issuing any resulting solicitation . Pre-solicitations are notices to potential bidders that a solicitation is on the way.
      • Pre-Award Terms
      • What Is A “Combined Synopsis/Solicitation?”
      • A solicitation is a request to submit offers or quotations to the Government.
      • -Solicitations under sealed bid procedures are called “invitations for bids.”
      • - Solicitations under negotiated procedures are called “requests for proposals.”
      • - Solicitations under simplified acquisition procedures may require submission of a “quote”.
      • Pre-Award Terms
      • What Are Some Important Things To Look For In a Solicitation Notice?
      • (1) Closing Response Date.
      • (2) Contact Point or Contracting Officer.
      • (3) Magnitude.
      • (4) Description.
      • (5) Place of Contract Performance.
      • (6) Set-aside Status.
      • Pre-Award Terms
      • What is a “Sole Source Acquisition?”
      • A contract for the purchase of supplies or services that is entered into or proposed to be entered into by an agency after soliciting and negotiating with only one source.
      • A Sole Source award can be made for the following reasons:
      • Only One Responsible Source and No Others are Satisfactory
      • Unusual and Compelling Urgency.
      • Authorized or Required by Statute.
      • International Agreement.
      • Industrial Mobilization, Research Capability; or Expert Services.
      • Pre-Award Terms
      • What is an Invoice?
      • A contractor's bill or written request for payment under the contract for supplies or services performed. The government usually pays invoices within 30 days (Net 30). If net payment discount terms are used (i.e. 2% Net 10), the government will seek to obtain that discount by paying the invoice early.
      • Interest accrues once the 30 day period has elapsed.
      • Invoices should be submitted electronically via Wide Area Workflow
      • Post-Award Terms
      • An Invoice must contain these following items (among others):
      • (i) Name and address of the contractor.
      • (ii)   Invoice  date and  invoice  number.
      • (iii) Contract number for supplies delivered or services performed
      • (iv) Description, quantity, unit of measure, unit price, and extended price of supplies delivered or services performed.
      • (v) Shipping and payment
      • (viii) Taxpayer Identification Number (TIN). The contractor must include its TIN on the   invoice  only if required by agency procedures.
      • (ix) Electronic funds transfer (EFT) banking information.
      • Post-Award Terms
      • What is a Receiving Report?
      • A receiving report is written evidence that indicates Government acceptance of supplies delivered or services performed. All invoice payments must be supported by a receiving report or any other Government documentation authorizing payment ( e.g. , Government certified voucher).
      • Receiving Reports are now completed electronically in Wide Area Workflow
      • DD 250
      • Post-Award Terms
      • What is Wide Area Workflow (WAWF)?
      • https://wawf.eb.mil/
      • WAWF is a paperless application that enables users to create invoices, create receiving reports, and access contract related documents electronically. Data accuracy is increased and the risk of losing a document is greatly reduced.
      • Post-Award Terms
      • Wide Area Workflow
      • WAWF Web-Based Training Site - Go here to learn how to use WAWF via self-paced, online training. This training is an excellent place to begin learning about WAWF. http://www.wawftraining.com
      • WAWF Training Practice Web Site - Go here to practice using the WAWF application. https://wawftraining.eb.mil
      • Post-Award Terms
      • What is an Option?
      • A unilateral right in a contract by which, for a specified time, the Government may elect to purchase additional supplies or services called for by the contract, or may elect to extend the term of the contract.
      • Post-Award Terms
      • What is a Protest?
      • A written objection by an interested party to the following:
      • (1) A solicitation or other request by an agency for offers
      • (2) The cancellation of the solicitation or other request.
      • (3) An award or proposed award of the contract.
      • (4) A termination or cancellation of an award of the contract
      • Post-Award Terms
      • With the knowledge that you have obtained during this training session, you are now well equipped to tread into the vast and immense waters of Government Contracting.
      • Should you have any further questions or need any additional assistance, your contracting resource center is here to help you navigate during turbulent times.
      • CONCLUSION