Contracting Officer Unlimited Warrant Board|Complete Questions with A+ Graded Answers
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WARRANT BOARD
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WARRANT BOARD
Contracting Officer Unlimited Warrant Board|Complete Questions with A+ Graded Answers
What is an option?
An option is a unilateral right in a contract, for a specific period of time, where the Government may elect to purchase additional supplies or services called for by the contract, or extend t...
Contracting Officer Unlimited Warrant Board|Complete
Questions with A+ Graded Answers
What is an option?
An option is a unilateral right in a contract, for a specific period of time, where the Government may
elect to purchase additional supplies or services called for by the contract, or extend the period of
performance.
The PCO should use options when (1) in the Governments best interest, (2) there is a need for service
beyond the initial period, and (3) to ensure continuity of service.
The use of options are not normally in the Governments best interest when (1) The foreseeable
requirements involve minimum economic quantities and delivery requirements are far enough in the
future to permit competitive acquisition, production, and delivery (2) an indefinite quantity or
requirements contract would be more appropriate than a contract with options.
What must a PCO do before exercising an option?
The PCO must determine that:
1. Funds are available
2. The requirement fulfills an existing Government need
3. Exercising the option is the most advantageous method price and other factors considered
4. The option was synopsized IAW FAR 5 (or exempted)
The PCO should have a written D&F in the file in order to use options
The PCO should also consider if the contractor is responsible and if their performance is satisfactory.
If the option price during a competitive source selection was not evaluated, is the option valid?
No. All options need to be priced because they were awarded on a competitive basis.
Can the PCO cite the "Changes Clause" to increase quantities on a production contract?
No. The Changes Clause cannot be used to increase quantities on a production contract.
(a) The Contracting Officer may at any time, by written order, and without notice to the sureties, if
any, make changes within the general scope of this contract in any one or more of the following:
(1) Drawings, designs, or specifications when the supplies to be furnished are to be specially
manufactured for the Government in accordance with the drawings, designs, or specifications.
(2) Method of shipment or packing.
(3) Place of delivery.
Is any approval required for an effort that is out of scope ?
Changes outside the scope of the original contract are considered new work and constitute a cardinal
change, and in this case, one of two things should happen:
1. Compete the new work
2. Get a J&A and seek proper approval
What are the four essential elements the PCO must address when making a Scope Determination?
1. Scope of the competition - could the original offerors have reasonable anticipated such a change?
2. Contract type - Requirments should be better defined in a FFP contract therefore require less
changes.
As opposed to a RDT&E contract.
3. Period of performance - will the PoP be extended significantly so as to constitute new work?
4. Overall cost/price change - what has been the total change in price throughout all modifications?
What must the PCO do for any change and/or modification estimated to be $1M or more?
,Obtain legal review of the proposed action and document the review in the contract file
Where can a PCO look to help determine if a change is in-scope?
Various source documents to include: SOO/SOW/PWS, synopsis, RFP, exchanges with industry,
market surveys, RFIs, etc.
What is "scope creep?"
Scope creep occurs when a series of in-scope changes make the contract as a whole out-of-scope. The
PCO must remain cognizant of scope creep when changing/modifying existing contracts.
What is a T&M contract?
Limitations. A time-and-materials contract may be used only if—
(1) The contracting officer prepares a determination and findings that no other contract type is
suitable. The determination and finding shall be—
(i) Signed by the contracting officer prior to the execution of the base period or any option periods of
the contracts; and
(ii) Approved by the head of the contracting activity prior to the execution of the base period when
the base period plus any option periods exceeds three years; and
(2) The contract includes a ceiling price that the contractor exceeds at its own risk. The contracting
officer shall document the contract file to justify the reasons for and amount of any subsequent
change in the ceiling price. Also see 12.207(b) for further limitations
on use of Time-and-Materials or Labor Hour contracts for acquisition of commercial items.
Can a T&M contract be used for a commercial service?
a) Except as provided in paragraph (b) of this section, agencies shall use firm-fixed-price contracts or
fixed-price contracts with economic price adjustment for the acquisition of commercial items.
(b) (1) A time-and-materials contract or labor-hour contract (see Subpart 16.6) may be used for the
acquisition of commercial services when—
(i) The service is acquired under a contract awarded using— Competitive Procedures, Fair
Opportunity, with an executed D&F
Define Certified Cost or Pricing Data.
All facts, that as of the date of price agreement, or if applicable, an earlier date agreed upon between
the parties that's as close as practicable to the date of agreement on price, prudent buyers and sellers
would reasonably expect to affect price negotiations significantly.
When is Certified Cost and Pricing data required?
When executing actions over $750,000 with the exception of prices established by statute,
commercial items, with adequate price competition, and when a TINA waiver is granted.
What is the "Bona Fide Needs" Rule?
The Bona Fide Needs Rule basically means that a federal agency must have a legitimate or bona fide
need for the requirement during the time period that the appropriation is available. Pursuant to 31
U.S.C. 1502(a), "The balance of an appropriation limited for obligation to a definite period is available
only for payment of expenses incurred during the period of availability, or to complete contracts
properly made during the period of availability and obligated consistent with Section 1501 of this
title.." In other words, the basic rule states that a fiscal year's (FY) appropriation may be obligated to
meet a legitimate or bona fide need existing in the FY for which the appropriation was made. This
aspect of fund availability seeks to ensure that only appropriations, which are available for a specific
,FY are used to meet the legitimate needs of that FY. The bona fide needs rule applies to both multiple
year and annual appropriations. TIME, PURPOSE, AMOUNT
You have just awarded 3 contract actions. You remember something in FAR Part 5 about synopsizing
contract awards. The first action was a Small Business Innovation Research contract for $99,978. The
second action was a $3M new delivery order under an existing IDIQ contract and the third action was
a purchase order for $12,995. As a PCO, would you synopsize these contract actions?
SBIRs, delivery orders under existing IDIQ contracts and actions under the simplified acquisition
threshold ($150K) do not require an award synopsis. However the dollar threshold is not a prohibition
against publicizing an award of a smaller amount when publicizing would be advantageous to industry
or to the Government.
What is the requirement for obligating funds when awarding indefinite-quantity contracts?
For ID/IQ contracts all supplies and services to be furnished shall be obtained via delivery order(s) or
task order(s) issued by individuals designated in the contract. Upon execution of the contract, an
obligation shall be recorded based upon the issuance of a delivery or task order for the cost/price of
the minimum quantity specified. Obtaining a certification of availability of funding from the finance
office does not satisfy the requirement to record an obligation in the official accounting records of the
Government for the minimum order amount established by the award of an IDIQ contract. The
Government's actual obligation must be recorded at the time of contract award. Recording and
subsequently reporting the required obligation using anything other than a delivery or task order will
result in the action not being reported in FPDS-NG. The Recording of Obligations Act is implemented
in the DoD Financial Management Regulation (FMR) (DoD 7000.14-R) (See paragraph 080504 of the
FMR). The Defense Finance and Accounting Service (DFAS) is responsible for recording contractual
obligations in the Air Force accounting records. Where the quantity required under a contract is
indefinite, the ultimate amount of obligation is determined by subsequent orders; the amount of any
required minimum order specified in the contract, however, shall be recorded as an obligation upon
execution of the contract. For contracts that require the contractor to perform unilaterally placed
orders above the required minimum, record an obligation in the amount of the order price or ceiling
at the time the order is placed. An order in excess of the required minimum that has to be negotiated
or accepted by the contractor under terms of the contract shall be recorded as an obligation upon
contractor's acceptance of the order in the amount of the agreed price or ceiling . In the case of
orders for services where a contractor cannot undertake performance without direction from an
authorized Government official, order amounts may be consolidated periodically (at least monthly)
into a list of orders placed with the contractor identifying the estimated dollar amount of each. On
definite-quantity contracts, obligate the full amount of the definite quantity at the time of contract
award.
When may a T&M contract be used? What must the D&F contain? Who would approve the following
D&Fs: A T&M contract for $650K; A T&M contract for $500K in which the base period plus option
periods will be a total of 4 years; A T&M contract for $1.5M of services (base plus options will be 5
years.)?
T&M contract may be used only when it's 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, and ONLY if the PCO prepares a D&F that "no other contract type is suitable," and the
contract includes a ceiling price that the contractor exceeds at their own risk. The D&F must contain
sufficient facts and rationale to justify that no other contract type is suitable (should go through all
the contract types). At a minimum the D&F shall include a description of the market research
conducted and establish that it is not possible at the time of placing the contract or order to
accurately estimate the extent or duration of the work or to anticipate costs with any reasonable
degree of certainty. A T&M contract for less than $1 million would have the PCO as the approval for
the D&F. A T&M contract for $500K in which the base plus options is 4 years would be approved by
the HCA. A T&M contract for $1.5 of services, where the base plus options will be 5 years, would be
approved by the COCO and then the HCA.
, As a PCO, what kinds of things could cause you to lose your warrant?
A PCO loses their warrant upon retirement from employment, reassignment from the position
requiring a warrant, termination of employment, or unsatisfactory performance. Terminations must
be in writing, and requests must be submitted 30 days in advance of the requested termination along
with the reason.
Recent focus has been on decreasing the amount of time it takes to negotiate a contract. There are
several current examples of contracts that are taking months to negotiate from the date of business
clearance to the handshake. What can you do, as the PCO, to shorten this timespan?
As the PCO on the effort, you have the ability to negotiate "rules of engagement" before the
negotiation actually begins. You need to, with your counterparts, establish written rules regarding
who the major participants will be, where negotiations will be conducted, a schedule for completion
of negotiations, how much time will be permitted between offers and counteroffers, whether
negotiations will be on the telephone, in person, or by e-mail, whether DCAA will participate, and
whether you will accept "updated" proposals for anything other than BIG changes (not just rate
changes, etc.) I would establish that anything that could be handled at the negotiation table to
"update" the proposal, should not require an updated written proposal.
I would keep the contractor aware of exceptions all along the way to avoid surprises in negotiations.
You are the PCO on a new acquisition and have just received the DCAA audit for the $12M proposal
that you received last month. The audit had $100,000 in questioned material costs, and $100,000 in
unsupported costs for the subcontractor labor hours. As you put together your clearance charts for
the effort, you realize that you have only decremented $30,000 from the proposed materials costs in
building your objective, and you find that decrement to be fair and reasonable. You have
decremented the entire $100,000 that was unsupported in the audit from the costs proposed for the
subcontractor labor, and you find that decrement to be fair and reasonable. What must you do?
DPAP policy letter dated 4 Dec 09 highlights the responsibilities of the PCO when he/she does not
include significant audit recommendations in the Air Force Objective. The letter excludes
"unsupported" costs, and focuses only on "questioned" costs in the audit. So we won't even focus on
the "unsupported" cost category. When the PCO plans to sustain less than 75% of the recommended
questioned costs in the Air Force Objective, and the proposal is $10M or more, the PCO must have a
discussion with the auditor and document the disagreement in writing to the auditor, and through
business clearance before negotiations! If business clearance is approved, then the disagreement is
supported. If the auditor doesn't agree with the decision of the PCO, and the subsequent approval by
the Clearance Approval Authority, then DCAA may request a higher level review, which could go all
the way to DPAP. In our case, our proposal is over $10M, and the only 30% of the questioned costs
were sustained by the PCO. Unless the PCO upholds at least $75,000 of the $100,000 in questioned
costs, he/she will have to discuss why not with the auditor, document that in the business clearance,
and possibly defend his/her decision at a level all the way up to DPAP.
When the contracting officer properly issues a unilateral change under the Changes clause, what
responsibility, if any, does the contractor have to continue performance?
The contractor must continue performance of the contract as changed, except that in cost-
reimbursement or incrementally funded contracts the contractor is not obligated to continue
performance or incur costs beyond the limits established in the Limitation of Cost (fully funded) or
Limitation of Funds (incrementally funded) clause.
Describe what a warranty provides and describe its use in a cost-reimbursement type contract?
Authority: FAR 46.702(b) / FAR 46.705(a) / DFARS 246.705
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