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This module addresses the basics of government contracts. It covers substantial territory.
CHAPTER 1 – INTRODUCTION TO CONTRACT LAW
1. General Halftrack did not receive the appropriation to develop a 21st Century halftrack but did get an appropriation to place Porta Johns throughout Camp Swampy’s training areas. He has appointed Lt. Fuzz to be the program manager of the project. Lt. Fuzz profusely thanked General Halftrack for the honor. He saluted, did an about-face, and marched off, scratching his head wondering what the heck is a program manager. What role does the program manager play in government contracting?
2.General Halftrack is ecstatic because he finally got a letter from the Pentagon. He advised Lt. Fuzz, his trusted aide, that a Congressional committee authorized developing a new halftrack built with titanium and propelled by a turbine engine. He can’t wait to get started on the project. Lt. Fuzz reluctantly told him it isn’t yet a done deal since this is only an authorization. General Halftrack then stood Lt. Fuzz to attention and stated, “Listen to this, you young whipper snapper. I’ll read you the definition of authority from Webster’s dictionary: ‘to give authority for; formally sanction (an act or proceeding).’ How can Congress, having given authority to develop the vehicle, result in the command being prevented from actually developing the vehicle?”
Lt. Fuzz hesitantly replied that two of Congress’s duties include both “authorizing” purchases and “appropriating” funds.
“Now what?” exclaims the golf-loving, politically incorrect and hopelessly inept commanding officer of Camp Swampy as he tries to figure out what’s going on.
What is the difference between a Congressional authorization and a Congressional appropriation?
Lt. Fuzz then explained the difference between these two concepts. Please do the same.
CHAPTER 2: THE SETTING
Federal government contracts are subject to specialized rules that are not applicable to contracts between commercial firms.
The Federal Acquisition Regulations (FAR) provide many rules that are unique to contracting with the Government. For example, the Government may make unilateral changes to the contract without breaching the contract, the private firm must continue to perform the contract while a dispute is pending, the “termination for convenience” clause prevents contractors from recovering anticipatory profit in situations which would normally constitute breach of contract in the private sector, the “bona fide needs” rule and the anti-deficiency and advanced payment statutes limit the Government’s ability to enter into binding contracts that extend past the current fiscal year, the Government may audit the books of the private firm, and the Government may prosecute for fraud under the false claims and false statements statutes.
The FAR may be accessed on a web page maintained by the Government Printing Office, at: http://www.arnet.gov/far/
Because the Federal Government uses public funds in purchasing products and services vital to military and civilian programs, the public has a significant interest in the assurance that Government contractual transactions are fair and efficient. This public interest in most instances is stronger than the public interest concerning fair and efficient dealings between private parties.
The procurement laws and implementing regulations attempt to preclude Government personnel from engaging in wasteful or inefficient practices while directing private firms to be fair in their dealings with the Government.
3. What is the Federal Acquisition Regulation (FAR), in general terms, and what two organizations revise it?
4.Julius, a Corps of Engineers field engineer, but not a contracting officer (CO), had significant responsibilities with the Caesar Dam Project. The Caesar Dam was springing minor leaks, so Julius ordered 50 cases of duct tape to plug the leaks. He bought these from a prominent contractor – Brutus, Inc. Brutus assumed that Julius had the authority to purchase necessary supplies for the dam, having discussed the Caesar job with him once. When Brutus submitted the invoice, the contracting officer (CO) refused to pay because Julius, not being a contracting officer, had no authority to commit funds and buy for the government. Brutus was ready to kill but, upon the urging of his attorney – who desired to make some money – instead filed a lawsuit against the Corps of Engineers demanding payment. Brutus’ attorney argued that Julius had apparent authority to bind the government.
a.Define “apparent authority.”
b.Is Julius going to prevail in this lawsuit based upon the apparent authority argument? Explain why you concluded as you did.
5. Silvia, a division chief in the human resources office at Camp Swampy, disapproved Sam’s request for leave. Since she had approved Sally’s leave request, he concluded the disparate treatment must be due to sex discrimination. Sam filed an Equal Employment Opportunity complaint against the agency alleging sex discrimination. A few months down the road, Sam’s attorney arranged to depose Silvia. Charlie, the agency attorney, decided to use the same court reporter to depose Complainant Sam. Charlie figured he’d depose Sam once Sam’s attorney had completed his deposition of Silvia. Is there a contracting problem with Charlie’s plans? Explain why you concluded as you did.
Chapter 5: COMPETITION.
6. What was the statutory objective in enacting the Competition in Contracting Act of 1984 (CICA)?
Why is this?
7. How does CICA define “Full and Open Competition?”
8. McChord Air Force Base is purchasing a vehicle for the commanding
general. Wanting to impress the boss, LT. Roscoe, his aide, has told the contracting officer to purchase a Mercedes. The CO told him that, since this would be a sole source purchase, he (the aide) must justify not competing the purchase. Lt. Roscoe, believing a Mercedes is in a class by itself, picked as his justification: “Only one responsible source and no other supplies or services will satisfy agency requirements.” Is this an appropriate justification to not compete the purchase of the Mercedes? Explain why you concluded as you did.
CHAPTER 6. CONTRACT TYPES
9. What is the difference between a fixed-price contract and a cost reimbursement contract?
Which one results in the contractor having a higher risk and why?
10. The Department of Treasury desires to award a contract to supply the government with gold for minting 100-dollar coins. Its duration is for three years. Because the price of gold typically fluctuates, the contracting officer, desires a firm fixed price contract, but is unable to obtain a contractor willing to agree to one. What variation of a fixed price contract could he use that would be amenable to contractors?
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