Contracting Officer Warrant board questions with complete solutions

Contracting Officer Warrant board questions with complete solutions You are the PCO for a major competitive negotiated source selection. The RFP, which reflects the user's requirements and is based on the user's budget, has a requirement for 220 cargo loaders to be delivered at 55 per year over the next four years. One offeror proposes to deliver all 220 loaders in the first year at a dramatically reduced price. Can you accept the offeror's proposal? What factors should you consider in your decision? You can accept the offeror's proposal under certain circumstances. Firstly, what did the RFP say about alternate proposals? Is this a situation where requirements are changed and the other offerors should be allowed to propose on the basis of the changed requirements? You need to ask the user if he wants all 220 in the first year and are the operating locations physically able to accommodate their loaders in the first year. Finally, the offeror could be taken into discussions and asked to conform to the RFP with there being the possibility of not being selected for award or elimination from the competitive range if the proposal is not made compliant with the RFP. You are the PCO on a new $2B aircraft development program. The program is in contract negotiations for a Fixed Price Incentive (Firm Target) System Development and Demonstration contract award to a sole source contractor. The program director, a fast-burning young colonel, e-mails you that she is very concerned with the aircraft's ultimate speed at the full specification payload. She would like the contractor to achieve the faster, desired objective speed rather than the mandatory threshold speed, and thinks that an objective performance incentive would be the way to go to achieve her goal. You are asked to go to her office and discuss the matter and the issues involved in using such an incentive. What do you tell the colonel? There are a number of considerations for the colonel: The desired additional speed should provide benefit to the Government in order to justify the expenditure of funds to achieve it. The colonel should be able to articulate the justification. The situation is very amenable to a classic performance incentive that would allow the contractor to earn profit for achieving the desired speed above and beyond what the final FPIF profit would be for achieving threshold speed. If the contractor perceives this can't happen, he will either not sign up to the incentive or will ignore it from Day One. The incentive and resulting payment have to be structured so as to be based on observable, measurable results that would determine how much is earned by the contractor. Subjectivity is not allowable under current AF policy without HCA approval. We have to be very careful to understand what possible unintended consequences could be caused by the existence of this feature in the contract. For example, will the contractor reduce aircraft weight beyond safe limits in order to help achieve the payment? Also, will the contractor consume excessive schedule to get the extra speed? There has to be a cost incentive in place so that the contractor doesn't spend an unconstrained amount of money to win the payment, such as under a CPFF contract. The FPIF share line serves this purpose when balanced against the incentive. The incentive has to be balanced with the FPIF share line so that the contractor doesn't spend more money to achieve the desired speed than he has potential to earn by receiving the payment. Similarly, the contractor can't be allowed to spend an excessive amount of money with little cost penalty to achieve success. In some cases, Contracting Officers are also Grants Officers. They can award Grants and Assistance Instruments as well as contracts. What is Assistance? How does it differ from Acquisition? What gives the Grants Officers their authority to enter into assistance? What are the types of Assistance? When the principal purpose is to transfer a thing of value, to carry out a public purpose of support or stimulation authorized by law of the United States, it is Assistance. Acquisition, by contrast, has the principal purpose of acquiring property or services for the direct benefit or use of the United States Government. Federal agencies must be authorized by statute to support or stimulate a public purpose. The statutory authority from Congress must exist either in broad legislation or in a program-specific statute. Absent that statutory authority, a Grants Officer may not use an assistance instrument. Authorities to issue Assistance can be of three types: (1) Provide to the Secretary of Defense by statute, e.g., 10 U.S.C. 2391; (2) Authority provided to DoD components that requires no delegation by the Secretary of Defense, e.g., 10 U.S.C. 2358; (3) Authority coming indirectly from statutes, i.e., federal statute authorizing a program that is consistent with using a grant or cooperative agreement. Two types of Assistance are Grants and Cooperative Agreements. They differ in the following way: In a Grant, substantial involvement is not expected between the agency and the recipient. In Cooperative Agreement, substantial involvement is expected between the agency and the recipient. Cooperative Agreements, then, are particularly useful in the research arena when the Government is interested in being involved in program decisions or may be doing some testing or research themselves. You are the Contracting Officer on a new Research and Development program. Proposals were recently received in response to a Broad Agency Announcement, and a Cost Plus Fixed Fee contract type is anticipated. The proposal most favored by the technical team was priced significantly under what was estimated for the effort. The contractor proposed fee in an amount that equates to 20% of the estimated cost. The users have more than enough funds to cover the proposal and want you to accept the price as is. How should you advise the user and what factors should you consider in determining a reasonable fee? The statutory limitation on fee for CPFF type contracts do no permit exceeding 15% of estimated cost for experimental, developmental, or research performed under a CPFF contract. Since the proposed amount of fee is outside the statutory limitations you need to determine what a fair and reasonable rate is that falls within the limitations. The FAR recommends a structured approach for determining fee such as Weighted Guidelines. If a cost reasonableness review determines the estimated costs to be acceptable, we can still negotiate and adjust the fee.