Contract Cost and Documentation for the Navy
Order Instructions:
Assignment 5: Contract Cost and Documentation for the Navy
Due Week 10 and worth 300 points
Based on the same scenario as in Assignments 1, 2, 3 and 4, you are now considering the final factors needed for your proposal based on RFP #123456789, dated 07/14/2014.
Additional factors to consider are:
1. The other local competitor has removed their name from consideration and has requested to become your company’s sub-contractor due to your company’s patent on the specialty coating.
2. Your existing floor equipment is dated. However, you have learned that the Navy base has floor equipment which is not currently being used.
Write a six to eight (6-8) page paper in which you:
1. Determine the payment type (i.e., receiving progress payments, performance-based payments, or partial payments) you will use in your bid. Provide a rationale for your response.
2. Determine the approach and the key terms that you would consider in requesting the use of the Navy’s floor equipment. Provide a rationale for your response.
3. Propose the quality control and inspection procedures that you believe should be included in your proposal. Provide a rationale for your response.
4. Determine, because of your company’s private patent on the specialty floor coating, whether the Navy would or would not have a patent infringement objection for the use of the coating. Provide a rationale for your response.
5. Determine the mechanism for contract closeout your company would use with the Navy. Provide a rationale for your response.
6. 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:
- Describe the nature of government contracting, including authority, responsibilities, and legal considerations.
- Outline and explain the process for developing competitive proposals and source selection.
- Explain the process for administering and evaluating contract performance.
- Explain the various mechanisms for contract closeout.
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.
Follow rubric attached.
SAMPLE ANSWER
Assignment 5: Contract Cost and Documentation for the Navy
Conditions and terms keep on changing and this requires the contractors to as well to adapt to these changes. Ben Rose Inc., is expected to as well incorporate the changes that have occurred to ensure that it meets the threshold. In this scenario, competitors of Ben Rose Inc., have removed their name and requested to become subcontractors because of the patent on the specialty coating. In line with the RFP #123456789, dated 07/14/2014, the paper deliberates on the payment type to use in this bid, determines the approach and the key terms to consider in requesting the use of the Navy’s floor equipment and proposes suitable quality control and inspection procedures. The author furthermore, determine whether the Navy would or would not have a patent infringement objection for the use of the coating and determine the mechanism for contract closeout the company would use with the Navy.
Even though different payment types are available to use such as progress payments and partial payments, the most suitable for the company is performance-based payment. This payment option is customary form of contract financing covered in the FAR part 32.10 (Acquisition. Gov, 2014). It is one of the payment method that contractors are authorized to use. This method is adopted if the contracting officers find them to be practical and if the contractor is satisfied and in agreement to use it. This type of payment is based upon achievement of specific, accomplishments or measurable events valued or defined in advance by those parties to that contract (Acquisition. Gov, 2014). The rationale for selecting this method of payment is hereby explained. One of the reasons is that the method allows the contractor to fully recover the finances in an event of default. The contractor is fully guaranteed to get the finances as per agreed terms. This will therefore savage the contractor from tussles with the sub contractors on payment of their dues. Another rationale for using this payment method is that it is flexible and has provision that will allow the contractor either to select financial payment option based on whole contract basis or on specific deliverable items (Acquisition. Gov, 2014). The contractor will therefore make the best decision that will enable the contract to be executed accordingly. The type of payment is also preferred as it enhances the technical and schedule focus performance as it will motivate the contractor to accomplish the events when executing the contract. The contractor will be in a position to ensure that all activities are accomplished promptly and in a more efficient manner (Acquisition. Gov, 2014). This will as well increase the rating of the contractor giving the company an upper hand in the future contracts. Performance based payment compared to progressive payment has a potentially improved cash flow to the company contractor. The total of performance-based payment is 90 percent of the contract price compared to progress payments that is 80 percent of the contract cost (Acquisition. Gov, 2014). Therefore, using performance-based payment is preferred. This type of payment is also essential, as its benefit of improved cash flow is significant for the contractor especially when the contract is of considerably less profit or low price (Acquisition. Gov, 2014). The contractor stands a chance of getting a better financial deal when compared to a higher price deal with a similar contract that uses progress payments. This is a win-win deal as it puts into consideration time value of money when measuring the cost to the Navy and benefits to the contractor of the now improved cash flow. Time value is slightly greater to the contractor when compared to the defence department if performance based payment is used. In addition compared to prompt payment, performance based payment, payment are not subjected to any interest penalty provisions. The payments are remitted as per the agency policy and the agreed terms hence; the contractor is guaranteed to get the funds without any penalty.
In requesting the use of the Navy floor equipment, the contractor must use certain approaches and key terms. One of the approaches is to enter into a negotiation with the Navy on the possibility of using the Navy floor equipment. The contractor should be persuasive for the Navy to give in. In the negotiation, the company contractor can negotiate for a certain fee to be able to use the equipment as a lease (Acquisition. Gov, 2014). This agreement should be documented and the parties must sign as a proof of agreement. The contractor as well can as well request the equipment to execute the contract within the shortest time possible. Therefore, because of this reduced time, the contractor can reduce the amount of fees for the contract. This will benefit both the contractor as well as the navy. The contractor will be able to finish the contract quickly and will save on the repair and maintenance of his own equipment. Time saved in this contract can as well be used to perform another contract. Similarly, the Navy will as well benefit as it will enjoy the facilities once they are ready and will save on cost since the contractor will reduce the cost that will cater for the lease of the Navy floor equipment. Key terms requiring consideration is the parties to be involved in the negotiation, the lease period, terms on the repair and maintenance and the duration of the contract, and documentation of the agreement (Acquisition. Gov, 2014). The parties that will be involved in the negotiation must have adequate information about the contract and the functioning of the equipment. This will ensure that the negotiation and agreements on lease are done in a fair manner. The lease period of the navy floor equipment is also very important, as it will determine the kind of agreement that the two parties to the contract will reach. The people that will be in charge of repair and maintenance of the navy floor equipment as well require deliberation to ensure that the parties agree and work together. The contractor must be clear on these aspects, as they will have an impact on the terms and conditions of the contract. They navy floor equipment will alter the previous agreements because it is not known by the contractor and is exposed to wear and tear when used in the repairs.
Quality control and inspection procedures are essential to ensure that the contract is completed successful and meets the threshold. To ensure high quality the company will come up with a quality control plan. Process control testing will be done where material to be tested will be listed and test conducted and testing done on sample materials (U.S Department of Transportation, 2012). After this, the inspection of the repairs will be done continuously. In preparatory phase, all contract requirements will be reviewed to ensure compliance of materials. This stage will ensure that personnel and equipment are able to comply with the contract requirements. At start up phase, contract requirements will be reviewed with personnel to perform the work, workmanships standards will be established and necessary training will be done. During production phase, inspections will be done to ensure that the contract moves on as expected and the work of high quality. Personal qualifications and work of subcontractors will be recorded to ensure that the process moves on smoothly and meets the threshold.
The company has a private patent on the specialty floor coating meaning that it has been given or granted a property right as the inventor of this design. This is a design patent and the company has limited monopoly as it has been granted exclusive rights to use the coating and to sell. This innovation will benefit the company but for a limited period and on expiry of the period, the patent becomes obsolete and the owner cannot sue (Cornell University Law School, 2015). Therefore, in this case, Navy has a patent infringement objection as they have no right to use the specialty floor coating to advance their own interests. This innovation is protected and the company has the mandate to sue the Navy if the specialty coating is used for their own benefit. The innovation remains the property of the company until that time that the patented expires (Cornell University Law School, 2015). On expiry, the Navy will not be under any legal restriction or will not be held responsible for infringement of the patent. The period allowed is enough to enable the company to reap from its innovations. The reason why the patent has an expiry date is to allow more investments in time and resources in development of new and essential discoveries. Therefore, Navy would not have a patent infringement objection to use the coating for their own benefits the moment the patent expires. Before the expiration of the patent, the Navy has no legal authority to claim ownership of the coating. Even though, the Navy will enjoy the services of the coating, it remains the property of the contractor or the owner until the time it was given elapses.
Different contractors use different mechanisms for contract close out. In this case, the company will use standard procedures in its closeout. This mechanism has various issues that the constructor and the Navy must agree before the final certificate of completion is granted. Various reasons explain the decision to use this close out mechanism. One of the reasons explaining the rationale for selecting this mechanism is that it allows the close out to receive adequate evidence about completion of delivery of the services. The contractor requests for contracting officer representative certification of contract completion to ascertain whether in deed the contract is complete to the satisfactory level or not. This therefore, allows the Navy enough time to inspect the services and to provide a feedback. The contract can be terminated or can be extended to ensure that it meets the expected threshold. Therefore, this gives an opportunity for the Navy to investigate whether it meets the terms and conditions as agreed. The Navy therefore gets an opportunity to express whether they are satisfied with the services or not. Standard procedures is as well preferred because, it is documented and is official. All the documents are provided and filled hence, can be used as a source of evidence. Using this mechanism is also supported because it helps to reduce instances of payment deficits. To offer close out, evidence of all final payments must be provided to ensure that the contractor has up to date payment. This mechanism is therefore, essential as it ensure transparency. The mechanism furthermore, allows the contractor and the Navy to have a positive sustained relationship even after the completion of the contract. This is because, the process are open and transparent. The mechanism as well has provisions that requires that subcontractors re settled by the major contractor putting in mind that the company has sub contractors that are assisting to provide the services. This therefore, ensures that the subcontractors are given their rightful dues hence reducing conflicts relating to their payment (HHS.gov. 2015). The mechanism as well allows for the filing of contract completion form that gives the contractor an assurance whether or not the contract has met the objective. This gesture ensures that the contractor gets their dues as the Navy enjoys the services provided. Furthermore, the mechanisms adopted in this closeout as well considered the past performance assessment of the contractor (HHS.gov. 2015). This is essential as it ensures that the contractor remains steadfast and is motivated. For the contractor, this is important especially if the contractor has a good performance record as the probability of such contractor getting more a contracts in other government entities increases. Therefore, using this close up mechanism for the Navy contract is essential as it indicates the level of confidence in the service delivery. It gives Navy enough time to evaluate and inspect the work to ensure that it meets the threshold (HHS.gov. 2015). Therefore, this mechanism as well enhances the relationship between the contractor and the Navy and as well gives the contractor an upper hand to get other related contracts in future if the work done is superb and meets the threshold of Navy.
In conclusion, it is apparent that contracting is a length process and sometimes can be tiresome. Contractors must put into consideration after getting an opportunity to provide services. In this case, some changes may happen which might require alteration of the plan. It is apparent that the company had to make adjustments the moment some of its competitors opted to become subcontractors as well as when the company learned that the Navy had floor equipment was not in use. The company therefore must be able to enter into negotiation to request the Navy to use its floor equipment. The negotiations must be free and fair and may result into a decision that may be binding. The Navy may decide to lease the equipment or request for reduction of the period of repair and costs of the contract. The company as well used performance-based payment because of its advantages compared to other methods. Quality control and inspection procedures, patent infringement objection and closeout aspects are as well important in contracts as they contribute to successful implementation and completion of the contract.
References
Acquisition. gov. (2014). Subpart 15.2—Solicitation and Receipt of Proposals and Information. Retrieved from: https://acquisition.gov/far/current/html/Subpart%2015_2.html
Acquisition. gov. (2014). Subpart 32.10—Performance-Based Payments. Retrieved from: https://acquisition.gov/far/current/html/Subpart%2032_10.html
Cornell University Law School. (2015). Patent. Retrieved from: http://www.law.cornell.edu/wex/Patent
HHS.gov. (2015). Contract closeout guide chapter 3- Closeout procedures. Retrieved from: http://www.hhs.gov/asfr/ogapa/acquisition/contract-closeout-chapter3.html
U.S Department of Transportation. (2012). Contractor Quality Control Plans . Retrieved from: http://www.cflhd.gov/resources/construction/documents/qc_plans.pdf
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