Acquiring a Contract with the Navy
Order Instructions:
Assignment 3: Acquiring a Contract with the Navy
Due Week 6 and worth 300 points
Based on the same scenario as in Assignments 1 and 2, you are ready to begin considering the factors needed for your proposal based on RFP #123456789, dated 07/14/2014. Remember that another local competitor intends to submit a proposal as well.
Before beginning this assignment, review FAR Subpart 19.5—Set-Asides for Small Business, located at http://www.acquisition.gov/far/html/Subpart%2019_5.html
Additional factors to consider are:
Both your company and your competitor’s company will qualify under the HUBZone Act
(FAR 19.5).
Based upon the scope of work required, your initial estimates for the contract will exceed $150,000. Therefore, you are willing to offer incentives to the Navy.
Your competitor intends to submit a proposal for a one (1) year contract.
Write a six to eight (6-8) page paper in which you:
- Examine two (2) reasons why your business would qualify under the basic concepts of the HUBZone Set-Aside Procedures. Provide a rationale for your response.
- Analyze the primary way(s) in which a multiyear contract would benefit both the Navy and your business.
- Determine whether your bid proposal should be based on a fixed-price, a cost-reimbursement, or a time-and-materials type of contract. Provide a rationale for your response.
- Determine the category of incentives that you are willing to offer (i.e., cost, schedule, or performance). Provide a rationale for your response.
- Determine whether your bid proposal should be a technical, management, or cost proposal. Provide a rationale for your response.
- Speculate on five (5) potential risk factors that you will need to consider if your company is awarded the contract. Provide a rationale for your response.
Use at least three (3) quality references Note: Wikipedia and other related websites do not qualify as academic resources.
Your assignment must follow these formatting requirements:
- Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
- Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
The specific course learning outcomes associated with this assignment are:
- · Interpret the Federal Acquisition Regulation (FAR) as it relates to small-business programs.
- Describe the various types of contracts and considerations for their use.
- Outline and explain the process for developing competitive proposals and source selection.
- Use technology and information resources to research issues in federal acquisition and contract management.
- Write clearly and concisely about federal acquisition and contract management using proper writing mechanics.
SAMPLE ANSWER
Assignment 3: Acquiring a Contract with the Navy
Some provisions in the FAR such as Historically Underutilized Business Zone (HUBZone) Program (FAR 19.5) require that certain contracts are set aside for small businesses. This is a government initiative to help foster economic development in these companies. In this scenario, a local competitor has submitted a proposal for the same contract and therefore both my company and that of competitors will qualify for the contract under HUBZone Act (FAR 19.5). Based on my company scope of work, my initial estimates for the contract will exceed $150,000 hence I will offer incentives to the Navy. Competitors wish to provide a proposal for the contract for 1 year. The paper delineates on various aspects that relate to acquisition of a contract in the Navy in reference to the RFP#123456789, dated 07/14/2014.
Various reasons explain why my small business will qualify under the concept of HUBZone set-aside procedures. One of the reasons is that the contracting officer is certain that my company and my competitors are going to tender their proposal for the contract (Navy Air, 2015). The business belongs to the category of small businesses and therefore it has higher chances of qualifying. The second reason why my company would qualify under the concepts of HUBZone set-aside procedures is that the award is expected to be made at a fair market price and that this award will be restricted for competition amongst small businesses (Acquisition. gov. 2015). My company is considered small and will help increase employment opportunities among the population. It will also help increase investments and trigger economic development in my location as it is located in underutilized business zones (HHS. Gov. 2015).
Multiyear contracts have benefits to both the Navy and my business. In a multiyear contract, the contractor acquires a more than one year tender to render certain services to the contracting party under a single contract award without necessarily having to exercise an option for every program year in year out (Gao. Gov. (2015). Therefore, under this arrangement, the contractor can contract for more than 2 years even though funding will still be appropriated on an annual basis. One of the primary ways multiyear contracts benefit the contractor and the Navy is that it helps in saving the costs and it ensures that there is improvement when it comes to use of the contractors resources. Through these contracts, unit cost is expected to be lower compared to annual contracts through various ways. One of the ways that these unit costs reduce is through purchase of parts and materials in economic order quantities, improved efficacy and production processes, limited changes in the designs and stability in designs, better utility of the facilities and cost avoidance as the burden of placing and administering annual contracts diminishes (Gao. Gov. (2015). Administration challenges reduce with decreased paperwork. The Navy and the company will not have many renewals when rolling out over the contract every year and this is expected. Multiyear contracts as well help in stabilizing the services and contractor relationships. The company is in a better position to ensure that they render quality services in long term to meet the performance expectations. The company will have an ability to focus on long term programs through planning to ensure that better quality services are provided. Contractor relationships are also developed and improved through multiyear contracts. The contractor and the Navy will get to know each other through these relationships. They can develop good communication that is a roadmap to achieving success in the future. Multiyear contracts as well help to improve management as it is easy to achieve a timely initial data as it requires the authority of the contracting officer’s signature to renew the contract. A multiyear contract is also beneficial as it encourages a shift to more flexible contracts and budget terms between the company and the Navy. Furthermore, the long and stable time horizons provide an opportunity for the contractor and the Navy to plan, ensuring efficiency and effectiveness in the delivery of services.
Contracts are classified into various groups such as fixed price, time and materials, and cost-reimbursement. Selecting the appropriate type of contract is important and requires in depth evaluation of the contractor situation. In this bid, the most appropriate type of contract that my company will select is a fixed price contract. This is because this contract type has various options that I can select to suit me. The fixed price types of contracts usually provide the contractor with a fixed cost and in other occasions, the price may be adjusted. The fixed price contract that provides an opportunity to adjust price is the preferred one and it includes a target price and ceiling price or even both. Under this arrangement, the target and ceiling price are subjected to a revision or adjustment under the circumstances stated. Even though firm fixed prices provide a price not adjustable, the contractor bears maximum risk, it is the best as it is possible to understand the projection of the profit (John, 2010). Furthermore, because of the experience my company has had in contracting, firm fixed price is the best. Firm fixed price is also appropriate because my company will be able to minimize on the costs to accrue huge profits. The company can manage costs by ensuring that the project begins earlier and the time for completing the contract is minimized.
Various types of incentives are available to contractors. Some of these incentives are the cost, performance and cost incentives. For the sake of this project, I will use cost incentives. These are the most common form of incentive contracts. They allow an estimation of the target fee or profit when the contract starts (Acquisition. gov. (2015). The full profit or fees is usually paid when the actual cost meets the target cost. This form of incentives as well motivates the contractor to manage the costs effectively and this will ensure that the contract costs are minimized for the contractor to accrue some profits. Furthermore, using this incentive provides an opportunity for the contractor to provide other incentives without necessarily having to provide a constraint (Randall & Lynn, 2007). Furthermore, using cost incentives is flexible as it can be adjusted within constraints of price ceiling or maximum or minimum fees. The contractor is deemed to accrue target profits or fees when the actual cost meets the target. When the actual cost is below the target, the contractor will enjoy upward adjustment of the target profit or fee hence beneficial to the contractor. Therefore, using cost incentives will enable the contractor to deliver efficient services at reduced cost hence accruing more profit.
Proposals can either be technical, cost or management depending on the way the contractor deems appropriate. My proposal will be technical to be able to compete favorably with the rest. The rationale of using a technical proposal is to ensure that my chances of getting the contract are higher. With a technical proposal, the focus is not only on the price but it ensures that all the important aspects are captured to attract the attention and to persuade the contracting officer to award the contract to me. Nowadays, the government contracts entities that have the capability to deliver the services effectively and efficiently. Therefore, the only way that I can emerge victorious and win the contract is by ensuring that the contract is clear and precise as well as detailed. The proposal must provide the best value and therefore it will focus on technical aspects such as proficiency, manpower, clarity of approach, past performance, and though leadership. The process should also highlight on the management approach and quality control approaches that I will be able to use to ensure that the project is successful. The proposal will be able to show the plan to follow to conduct the project to be in a position to meet the requirements set in the solicitation. By illustrating that I do understand the work statement in the proposal, this will give me an upper hand and will increase the chances of winning over the contract. By also providing information on my past performance, I will be able to reflect my business performance risks by telling the Navy about my experience and how well I did previous works (Rumbaugh, 2010). Looking at my past performance information will increase my level of rating especially if my track record has been good. This will as well give me an upper hand in this bid. I will also include a section on my management approach to illustrate to the contracting officer my clear undersigning of the project deliverables and tasks (Smotrova-Taylor, 2012). This will allow me to provide information on the project teams that will deliver the services, how the project will be managed, executed, monitored and controlled. The strategies that the project will adopt to ensure that the project is completed successfully will also surface at this juncture. This information provides the contracting officer an opportunity to acknowledge and experience my management skills and my competence in managing contracts. A technical proposal will as well enable me to showcase my level of understanding about the quality control approach, something that will also increase my chances of being selected. I will be able to identify the procedures, processes and metrics likely to predict successful costs and schedule outcomes. This opportunity will also give me a chance to show that I have put in place quality control metrics for gathering reliable data to show how the project is running (Osborne, 2011). One of the tools that will assist in measuring quality is Plan Do Check Act (PDCA) a four stage cycle that will help to move from problem faced to problem solved as the company still focuses on continuous improvement. Therefore, among these proposal types, a technical proposal is the best as it detailed but precise. This proposal allows me to furnish all the information in depth which will increase my chances of winning the bid and getting the contract. The Navy will require enough proof of my capabilities to render high quality services and this can only be proved through this proposal.
Contractors are exposed to different kinds of risks and it is important that they put in place a risk mitigation plan to manage the risks. Risks if not well managed well can deter achievement of the goals and objectives of a contractor. Therefore, ensuring that appropriate plans to contain or prevent the risk are in place will go a greater magnitude to help control these risks (Smith, 2003). Therefore, in case my company is awarded the contract, the potential risk factors that I will consider include cost related risks, time related risks, quality related risks, environment related risks and safety related risks. Costs related risks may lead to increased costs reducing my profit margin and therefore, it will be noble to ensure that they are mitigated (Ward & Chapman, 1995). Some of these cost-related risks that I will face will include variations in designs, occurrence of disputes when work is on progress, price inflations on the construction materials, many or excessive or lengthy procedures in approving the projects, incomplete or inaccurate cost estimate and inadequate program scheduling among others (Schuyler, 2001). Some of the risks are intolerable but can be minimized. Time-related risks include, tight project schedule, bureaucracy in government that may delay the start of the project, incomplete approval of other documents among many others (Patrick et al., 2007). Quality-related risks that I will encounter may include, tight project schedules that may compromise on the quality of work, inaccurate cost estimates, high performance or quality expectations that may not be realistic, variations in designs, and lack of coordination between project participants (Baker & Reid, 2005). The environmental related risks that I will be exposed to may include, serious noise pollution caused by the work underway, air pollution caused by chemical mixtures, and lack of sufficient professionals and managers (Nerija & Audrius, 2010). Safety related risks that the company is likely to be exposed include low management competency of the subcontractors, lack of fire extinguishers, general safety accident occurrence, poor or low quality of materials, and lack of coordination between the project participants. These potential risks are very important to the success of the contract and they should be well managed to ensure that the project does not stall.
In conclusion, contracting is a process that requires consideration of various issues. The interested parties must submit their proposal for consideration. They must demonstrate their capability to provide the services required as well. To ensure that small businesses and people from historically excluded areas get the opportunity to grow and invest, various legislation such as HUBZone set-aside procedures are very instrumental. Qualifying under this concept requires the bidder to demonstrate that they have the capability to execute the contract and that they are in the category of small business. The contractor may opt to get a contract for one year or for various years. Multiyear contracts have various benefits compared to one year contracts. This proposal as well is based on fixed price and the category of incentive offered was cost. The proposal selected was technical because it gives more opportunity for the bid to be selected. In contracts, it is as well very important to consider various potential risks. These risks may hamper achievement of the goals and mission of the contracts. The risks include quality, cost, environmental, safety and time related.
References
Acquisition. gov. (2015). Subpart 19.5—Set-Asides for Small Business
Retrieved from: http://www.acquisition.gov/far/html/Subpart%2019_5.html
Acquisition. gov. (2015). Subpart 16.4—Incentive Contracts . Retrieved from: http://acquisition.gov/far/html/Subpart%2016_4.html
Baker, W., & Reid, H. (2005). Identifying and Managing Risk , Frenchs Forest, N.S.W.: Pearson Education.
HHS. GOV. (2015). Chapter 11: Historically Underutilized Business Zone Program (HUBZone) Program. Retrieved from: http://www.hhs.gov/about/smallbusiness/Small%20Business%20Program%20Manual/ch apter11.html
Gao. Gov. (2015). Multiyear contracts. Retrieved from: http://www.gao.gov/htext/d08298.html
John, E. (2010). Government contracting. Retrieved from: http://www.ncmahq.org/files/Articles/847BD_cm_July04_44.pdf
Navy air. (2015). HUBZone program. Retrieved from: http://www.navair.navy.mil/nawctsd/Resources/Library/Acqguide/hubzone-program.htm
Nerija, B., & Audrius, B. (2010). Risk management in construction projects. Retrieved from: http://www.intechopen.com/books/risk-management-current-issues-and-challenges/risk- management-in-construction-projects
Osborne, S. R. (2011). Winning government business: Gaining the competitive advantage with effective proposals. Vienna, VA: Management Concepts.
Patrick, X.W et al., (2007). Identifying Key Risks in ConstructionProjects: Life Cycle and Stakeholder Perspectives, 1-14.
Randall, B., & Lynn, W. (2007). Incentives contracts. Contract management, 19-21.
Rumbaugh, M. G. (2010). Understanding government contract source selection. Vienna, VA:Management Concepts.
Schuyler, J. (2001). Risk and Decision Analysis in Projects (second edition), Pennsylvania: Project Management Institute, Inc, USA.
Smith, N.J. (2003). Appraisal, Risk and Uncertainty (Construction Management Series), London: Thomas TelfordLtd, UK.
Smotrova-Taylor, O. (2012). How to get government contracts: Have a slice of the $1 trillion pie. Place of publication not identified: A press.
Ward, S.C., & Chapman, C.B. (1995). Risk- Management Perspective on the Project Lifecycle, International Journal of Project Management, 13(3), 145- 149.
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