PART ONE

Case 1

My Advice on How the Firm Should Proceed
My advice given the particulars of the case would be to let the firm’s Fixed Price solicitation remain valid. This would eventually commit the firm to execute the contract proposal in the occasion that the contract is awarded to the firm.

Justification for MyAdvice

The justification for my advice takes two considerations into account. First, under fixed-price contracts, while price is fixed as per the rates that were tendered by the contractor, in some fixed-price contract provisions, the price can be adjusted for changes. As such, while there is the risk of a $3M loss for defaulting on the specifications of the contract, the firm can negotiate with the government so that the government modifies the specifications of the contract or the price after the award of the contract. This will have the effect of cushioning the firm from any losses, and on the contrary, guarantee the firm $3 million profit.

Secondly and lastly, in the occasion that negotiations with the government are not favorable, but in light of the perceived future benefits that will be derived from the execution of the contract such as more orders from other agencies as well as commercial firms, it would be judicious for the firm to execute the contract at the risk of incurring the $3 million loss. In executing the contract at the risk of the loss, the firm will in the process, create goodwill and reflect business integrity and ethics. This will also add to the firm’s performance record, including a record of tenacity in achieving acceptable performance, and the firm’s capacity for construction, production and technical equipment and facilities. This will guarantee the firm constant future stream of projects as they will have satisfied the Federal Acquisition Regulation as provided for in FAR Subpart 9.1 on Responsible Prospective Contractors.

Case 6

1. Is the requested change within the scope of the contract? Why or why not?

Yes, the requested change can be deemed to be within the scope of the contract. Since it is attributed to an act or omission of the client the change can be adjudged to be a constructive change and, therefore, the contractor can ask for additional relief and compensation subject to the Changes Clause.The requested change is within the scope of the contract since it is not an out-of-scope change that is outside the intent of or scope of the original agreement, however, it warrants compensation from the client since it was as a result of an act or omission on the part of the client. The change is also within the scope of the contract since it falls under a nature that a contractor would reasonably anticipate under the change clause.

2. Should the change be authorized today? Why or why not?

Yes, the change should be authorized today. This is because such Constructive Changes do not require any Formal Change Order for them to be authorized. However, for compensation, the contractor will need to provide evidence that it is the client who directed and compelled it to perform the additional work as a result of the change.

3. What would be the FAR authority cited for issuing such a modification?

The Federal Acquisition Regulation Changes Clause provided in for in FAR Part 43—Contract Modifications, Subpart 43.2 on Change Orders provides the guidelines for the issuance and validity of any modification on any contract (Part 43—Contract Modifications, Subpart 43.2—Change Orders)

4. Could such a modification be issued unilaterally? Bilaterally?

Such a modification could be issued unilaterally. This is because the directed change does not vary or significantly alter the material or critical terms of the original contract.

However, it is worth to note that in some contractual agreements for such a modification to be issued unilaterally, there must be a unilateral-amendment provision in the contractual agreement.

PART TWO

1. What is the general purpose of the Federal Acquisition Regulations? – Describe and discuss.[Five Points]

The general purpose of the Federal Acquisition Regulations (FAR) isoutlined inFAR Subpart 1.1,under 1.101 Purpose(Subpart 1.1—Purpose, Authority, Issuance_1.101 Purpose). The Federal Acquisition Regulations are one part of the FAR System, the other part being the Agency Acquisition Regulations.Under Subpart 1.1, the general purpose of FAR system has been stated as to codeand publish standardizedprocedures and policies to be employed during procurement by government agencies.The FAR Regulations are the principaldocuments whose chief purpose is to regulate all purchaseswhile the purpose of the Agency Acquisition Regulations is toexecute and, or complementFAR. The guiding principles that guide the FAR system are to have a system of acquisition that meets the needs of the customer with regards to cost, timeliness, and quality as well as maintain openness, integrity, and fairness while satisfying related public policy objectives (Management Concepts, 2015).

2. Describe the distinction between ‘actual authority’ and ‘apparent authority.’ May a government contractor reply on an individual’s order based upon ‘apparent authority?’ – Discuss.[Five Points]

When agents are acting on a principle’s behalf, they are either acting with Actual Authority orApparent Authority. Actual authority occurswhen an agent judiciouslyjudgesthat the principal has assentedto a specificdirection ofbehavior. It can either be Implied or Express. Express authority is when the principle specifically tells their agent they have theauthority to do something. Implied authority is when an agent reasonably thinks they possess the authority based on the principal’s actions.Apparentauthority, on the other hand, is the authority that a third party perceives the agent is having. If the third party judiciouslyperceives the agent to have authority, then they, in fact, have Apparent Authority.According to Bainbridge(2015), Apparent Authority exists in situations where the conduct or language of a principal makes a third party construe the conduct to indicatethat the agent has the authorizationto engage in the contract.

A government contractor may reply on an individual’s order based upon apparent authority. However, this will be contingent upon past or previous dealings where they have dealt, and it has been apparent to the government contractor that the individual has such authority and also in situations where no proper notification has been made to state otherwise. It is worth noting that while this is the case, FAR 1.602-3(b) provides legal mechanisms under which unauthorized commitments based on apparent authority can be ratified.

3. What is meant in general by the phrase ‘full and open competition?’ [Five Points]

This form of competitionis one of the requirements stipulated by FARfor the acquisition of, and award of contracts.In procurement, it is used to indicate that all contractors who are deemed to be responsible sources are allowed to present competitive negotiated or sealed bids in retort to an RFP or IFB(Kelleher, Abernathy, Bell, & Reed, 2010).However,the FARhas made exceptions and allowances to this form of competition undercertain conditions. For example, in times of compelling and unusual urgency as in time of war,industrial mobilization in time of national emergency, or the single source of supply, or if it serves thepublic interest (FAR Part 6—Competition Requirements_Subpart 6.3—Other Than Full and Open Competition, 2016).

4. Describe and discuss the distinction between ‘sealed bidding’ and ‘competitive negotiation.’ Under what circumstances is each used?[Ten Points]

Sealed Biddingis a contracting procedure which makes use ofcompetitive bidding,the opening,and award of presented bids publicly. According to FAR, this procedure involves Preparation for the invitation for proposal bids, invitation, Submission, and Evaluation of bids, and finally award of Contract. FAR guidelines provide four preconditionsfor adopting sealed bidding. These are, sufficient time to allow for solicitation, submission, and evaluation of bids, Price, and price-related considerations mustbe the criteria for award of contract, no discussions, and finally, theexpectancy that many bids will be received(FAR Subpart 6.4—Sealed Bidding and Competitive Proposals_6.401 Sealed bidding and competitive proposals).Abid must be in compliancewith the contract requirements, it has to satisfysolicitation and submission guidelines, and the contracting officer must confirmthat legal requirements and regulations, and all relevant proceduresare complied with. It is worth to note that sealed bidding may not be feasible or practical in cases of insufficient competition, lack of detailed specifications, or under emergency situations.

Competitivenegotiation is any award of acontractwhose awarding was based on any other procedure other than sealed bidding.It is applicable in situations where the awarding agency deems reasonably that the conditions prerequisite for sealed bidding are not unfavorable to the government or are not present. Under this procedure, the buying organization negotiates not only prices but also technical specifications, delivery period, quantity to be purchased, payment terms, transportation costs, and so on.The use of the competitive negotiation method of procurement is reserved for situations where the services desired require extensive discussions with offerors to determine the fairness and reasonableness of offers. Under this procedure, an RPF, as opposed to an IFB is used containing general system and performance specifications and indicating the evaluation criteria to be used the relative importance of each. The contents of proposals received are not disclosedpublicly, and information contained in any proposal is not divulged to competing offerors (Kelleher, Abernathy, Bell, & Reed, 2010).FAR provides for a negotiated ‘best value’ procurement process whereby the government is not required to award to the lowest-priced offeror, but through a trade-off evaluation process as specified in an RFP, the government makes an award to the offeror whose proposal provides best net benefit to the government (FAR Subpart 15.1—Source Selection Processes and Techniques_15.101 Best value continuum).

5. Discuss the issues of ‘responsiveness’ and ‘responsibility’ in the procurement process. [Ten Points]

Responsiveness and Responsibility are terms used during acquisition that is undertaken under sealed bidding procedures. Responsiveness refers to a contractor who has agreed to perform based on the terms of the governmentand is in compliance with the IFBregarding the method and timeliness of bid submission and the substance of any resulting contract (Murphy, 2008). Firms that submit a bid but indicate that they are unwilling to accept a certain term or condition are deemed to be non-responsive in which case their bid will no longer be considered foraward. A bid may also be considered non-responsive if the firm bids prices that the government finds to be “materially unbalanced.”On the other hand, to be responsible, a bidder must not have taken exception to any material aspect of the specification of the contract, work statement, or other preconditions of the contract.On the other hand, to determine whether the winning firm is Responsible, according to FAR guidelines, the contracting agency takes into account business integrity and ethics,sufficiency of funds to undertake the contract, thecapacityto be in compliance with the projected schedule, and the preexisting commitments. Other considerations include establishing whether the contractor has anacceptable performance history, including a record of tenacity in achieving acceptable performance on previous contracts, and finally, whether the contractor has the construction, production and technical capacity (Alexander, 2011).To be responsible, a bidder must be judged capable of performing and meeting the terms stated in the IFB.

The determinations of responsiveness and responsibility of a contractor aremade by a contracting officer. If the apparent low bidder meets both criteria, that firm gets the contract award as long as the bid price is reasonable. If the criteria are not met, the next low bidder is evaluated until the lowest, responsive, responsible and reasonably priced bid is determined. Bidders usually agree, by submission of their bids, to keep their bids open for acceptance during an evaluation period normally 60days.

6. Discuss the distinction between ‘fixed-price contracts’ and ‘cost-reimbursement contracts.’ Provide an example of each.[Ten Points]

Fixed-Price contracts are provided for in the FAR guidelines under Subpart 16.2 while Cost-Reimbursement Contractsare provided for in FAR Subpart 16.3.In Fixed-Price contract, a contractor assures the completion of a contract,on the other hand, the government guarantees imbursementof a pre-determined fixed price.In this form of contractthe contractor bears most of the risk.Fixed-Pricecontracts have the advantage that the contracting agency is aware of the price upfront, and the contractor can forecast sales.The weakness of this method is that the contractor risks setting a fixed price that is too low(Kelleher, Abernathy, Bell, & Reed, 2010).An example of where Fixed-Price contract is in manufacture goods which have already been developed with inflexiblyestablished specifications and for which no substantial variations are expected during production.Cost-Reimbursement Contracts are contracts where a contractor executes a projectunder preauthorized expenses referred to as allowable costs, and upon completion of the project, the contractor is reimbursed all the incurred costs by the government. In addition, the contractor is awarded a pre-negotiated fee as profit. In this arrangement, the government assumes most of the risk.  Under this contractual arrangement, both the government and contractor incur heavy administrative burdens in the form of monitoring and auditing the projects allowable costs. The strength of this method is that the contractor is aware and assured of the profits regardless of material costs and time. The disadvantage is that it caps potential earnings regardless of the efficiency of the contractor(Murphy, 2008). An example of where Cost-Reimbursement Contractsare mainly used is in purchase works that involve significant risk with regards to costs such as in research and development, and production, and in regards to technical feasibility.

Cost-Reimbursement and fixed-price contracts primary distinction iswith regards to the paymentapproach.While in Fixed-Price, a contractor is paid for a project basedon terms that wereproposed by the firm, in cost-reimbursement, a contractor is reimbursed incurred costs in addition to apayment presumed to cover profit and administration (Brooke & Buckley, 2016).

7. What is meant by ‘best value selection?’ Discuss what the Contracting Officer considers in making that determination. [Five Points]

The concept of best value selection is provided under Part 15 of Title 48 of the Code of Federal Regulations (FAR Subpart 15.1—Source Selection Processes and Techniques_15.101 Best value continuum). Under this procedure, the government is not required to award to the lowest-priced offeror, but through a trade-off evaluation process, as specified in the RFP, the government makes an award to the offeror whose proposal provides the best net benefit to the government.As defined by FAR, best value selection refers to acquisition which in the estimationof the government agency delivers the greatest overall net benefit in retort to thecontract requirements.According to Kelleher, Abernathy, Bell, & Reed(2010), the best value selection refers to the selection process through which the best deal offered by any of the offerors in a competitive acquisitionis identified. In sealed bidding, the best value is the lowest responsive bid price offered by any responsible bidder. In source selection, it is either the proposal that represents the best combination of evaluation factors or the lowest priced technically acceptable proposal.

In making a best value selection, the contracting officer considers a bid whichbrings the best net benefit at least cost to the government. It involves selecting the bid that is most responsiveness and responsible. That is, the contracting officer considers a tradeoff that incorporates the lowest responsive bid price offered by the most responsible bidderin the occasion that it is in sealed bidding. In source selection or competitive negotiation, the contracting officer considers the bid that represents the best combination of evaluation factors or the lowest priced technically acceptable proposal.

References

Alexander, D. J. (2011). Guide to Winning Federal Government Contracts (2 ed.). Fayetteville, Arkansas: Zweigwhite Publishing.

Bainbridge, S. (2015). Corporate Law. St. Paul, MN: Thompson Reuters/ Foundation Press.

Brooke, M. Z., & Buckley, P. J. (2016). Handbook of International Trade. Macmillan Publishers.

Federal Acquisition Regulation . (n.d.). Part 43—Contract Modifications, Subpart 43.2—Change Orders. Federal Acquisition Regulation.

Federal Acquisition Regulation. (2016). FAR Part 6—Competition Requirements_Subpart 6.3—Other Than Full and Open Competition. Retrieved from Federal Acquisition Regulation: https://www.acquisition.gov/far/html/Subpart%206_3.html#wp1086841

Federal Acquisition Regulation. (2016). Subpart 1.1—Purpose, Authority, Issuance_1.101 Purpose. Retrieved from Federal Acquisition Regulation (FAR): https://www.acquisition.gov/?q=browsefar

Federal Acquisition Regulation. (n.d.). FAR Subpart 15.1—Source Selection Processes and Techniques_15.101 Best value continuum. Retrieved from Federal Acquisition Regulation: https://www.acquisition.gov/far/html/Subpart%2015_1.html

Federal Acquisition Regulation. (n.d.). FAR Subpart 6.4—Sealed Bidding and Competitive Proposals_6.401 Sealed bidding and competitive proposals. Retrieved from Federal Acquisition Regulation (FAR): https://www.acquisition.gov/far/html/Subpart%206_4.html

Kelleher, T. J., Abernathy, T. E., Bell, H. J., & Reed, S. L. (2010). Federal Government Construction Contracts: A Practical Guide for the Industry Professional. Hoboken, New Jersey: John Wiley & Sons.

Management Concepts. (2015). Federal Acquisition Regulation, eBook Version, Quarterly Update: January 2015. Management Concepts Press.

Murphy, J. E. (2008). Guide to Contract Pricing: Cost and Price Analysis for Contractors, Subcontractors, and Government Agencies (Fifth ed.). Vienna, Virginia: Management Concepts Press.

Do you need an Original High Quality Academic Custom Essay?