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The topic for my Final Project will be on The Perils of Contractor Qualifications – Did I Choose the Right Contractor?
Main introduction to setup what the paper is about
Is Federal Contracting the right choice for me?
Discuss the benefits of doing federal contracting
What are the perils of doing Federal contracting?
Weigh in on the ups and downs of doing business with the Federal government
Thriving while doing Federal contracting
Discuss being successful in doing business with the federal government
Required Formatting of the Final Paper:
• This paper should be double spaced, 12-point font, and four to five pages in length excluding the title page and reference page;
• Third person writing is required. Third person means that there are no words such as “I, me, my, we, or us” (first person writing), nor is there use of “you or your” (second person writing). If uncertain how to write in the third person, view this link:
• Contractions are not used in business writing, so you are expected NOT to use contractions in writing this assignment.
• Use headings;
• Title page with your name, the course name, title of paper, the date, and instructor’s name;
• Include reference page.
• Use APA formatting for in-text citations and reference page. Students need to paraphrase and not use direct quotes.
The expectation is that you provide a robust use of the course readings. No other books besides the course eBook can be used. When using a source document, the expectation is that the information is cited and referenced with a page or paragraph number.
APA Standards
Students are responsible for APA only for in-text citations and a reference list.
• Part 1 Federal Acquisition Regulations System
• Part 2 Definitions of Words and Terms
• Part 3 Improper Business Practices and Personal Conflict of Interest
• Part 5 Publicizing Contract Actions
• Part 6 Competitive Requirements
• Part 7 Acquisition Planning
• Part 8 Required Sources of Supplies and Services
• Contracting Strategy, Type, Incentives (Under Course Resources)
• Part 9 Contractor Qualification
• Part 10 Market Research
• Part 12 Acquisition of Commercial Items
• Part 13 Simplified Acquisition Procedures
Common Commercial Practices
In contrast to government procurement, you will be hard pressed to find precedents for the Supreme Court’s intervention in commercial contract matters, nor would the apparatus of the federal government be called into action to resolve a dispute. Nonetheless, commercial practices also aim at maintaining the buyer’s and seller’s honesty and integrity. We can summarize commercial procurement practice as a multistep procedure that includes many of the same requirements as the government practice, such as needs identification, proposal solicitation, evaluation, source selection, contract formation, and finally contract performance and closeout.
You might ask what is at stake for a private enterprise that it should create for itself a standard high enough to rival that of the government. For private firms, the issues of credibility and reputation are important factors, because they too wish to maintain a supplier base (just as the Defense Department may wish to maintain an adequate industrial base). And firms may require close supplier relations to ensure adequate supplies, low prices, and a cooperative marketplace in which to deal.
Some conflict is probably inevitable from time to time, but the parties would prefer to have some history of amicable relations in their dealings with suppliers and customers. One key step in that relationship is to make certain that each party is fully prepared to enter into a contract and to fulfill its obligations. Just as the government is obliged to avoid deficiencies in its contracting procedures, parties to a commercial contract guard against any accusation of anticipatory repudiation, or the idea that one party to the contract knew at the time of signing that it would not be able to fulfill all of the contract’s terms.
• Part 14 Sealed Bidding
• Part 15 Contracting By Negotiation
• Part 16 Types of Contracts!177
• Part 46 Quality Assurance
• Cost Accounting Standards Board (CASB) Under Course Resources
Understanding the Specifications and Details of the Work
If you are the vendor or seller of the item or provider of the requested service, your first concern is ensuring that the contract’s statement of work (SOW) can be accomplished. Assuming your technical experts are reliable, your attention must be directed to how the work definition or design is originated and the schedule for performing the job.
The origination of the design is very important because, if you are the originator of a design specification, you may be held responsible for the performance of the item. If the design comes from the customer or buyer of the item or service, your proposal and the resulting contract most likely will create a program that fulfills the design. Should you satisfy the customer’s work standard and the product, service, or program does not function as the customer thought it should, then the fault rests with the customer. However, had you designed the product and implemented it through this contract, the fault rests with you. These contrasting responsibilities of design vs. performance specifications are so significant to everything else that will happen—from payment, to ownership rights, to warranty, etc.—that you must pay extreme attention to this detail of the contract (and anticipate all its ramifications).
Delivery and Inspection
How the product or service will be delivered and inspected is usually defined in the contract, and the timing of these events is critical to avoiding penalties or default. Inspection may occur during manufacturing, before or after shipping, or during installation; similarly, delivery may be understood to have different meanings and may occur at different times. Both parties to a contract must understand how they wish these terms to apply to them.
Delivery identifies when, where, and how a product or service is to arrive at the customer’s desired location. The customer may require strict adherence to a schedule, due to its reliance on related deliveries; a delay in one area may result in delays in deliveries in other contracts. Also, the customer may have assigned its personnel to a specific location in order to receive the delivery and may have reserved space or transport services, and your failure in this area may cost the customer in terms of expenses and time.
Inspection is an often misunderstood contract criterion because it suggests that the contractor has passed a critical milestone that he may have to pass again in a slightly more rigorous fashion at acceptance. Typically, a customer requires inspection at some time prior to shipment to a work site, but it rarely connotes terminal or final acceptance that triggers a final payment.
Inspection rights for both government and commercial arenas may include the right to inspect a production facility, to sample a semi-finished or finished product, to test the operational look and feel in order to confirm that the contractor has been moving down the right path in completing the project. Whatever type of inspection is desired, it amounts to a sort of “kicking the tires” that does not constitute acceptance of this work performed to date. Especially in commercial contracts, inspection is a negotiable topic that often draws a lot of attention between the contractor and the customer. An eager buyer is excited about the opportunity to test its new acquisition, while a seller may be focusing his attention on maintaining momentum and maintaining the schedule without any midcourse distractions. A bargain is usually struck so that an adequate inspection can be conducted without undue impedance to the overall schedule.
Perhaps the most important definition the contracts professional will establish is the one that addresses when the work will be completed. Here it is important that all parties recognize what standard is to be applied, what testing will be done, and what reports or documents must be submitted to mark this most major milestone.
Ideally, the parties want to define the standard—one that is either objectively recognized by the industry or one that is defined specifically by the contract itself. In a turnkey project, acceptance usually also determines when title to the goods will pass and when the goods will be turned over to the customer. This is the moment when responsibility for insurance and risk of loss pass to the buyer and when the contractor’s liability for protecting, maintaining, and safeguarding the goods is relinquished to the customer. Also, this moment marks when final invoicing usually occurs—unless payment is to be withheld pending other activities (e.g., the determination for and assessment of any damages).
Warranty is another key concept in contracting. The idea is that the seller shall provide support and assurances to the customer after the acceptance of the goods or services. Many commercial customers will delay the final payment until the warranty period has expired to ensure compliance with its terms. Another common commercial practice is to determine a fair sharing of the shipping and insurance costs to return defective goods to the manufacturer. The decision regarding this issue may also be tied to the levels of spare parts the buyer is acquiring, and the parties may haggle over these details to reach an agreement. As you can see, in the negotiations that define the contract, the parties can trade off their desires, their risks, and their costs in order to reach the bargain they desire.
The key concept in warranty to the supplier or seller is that it represents an ongoing liability and responsibility that it wishes to limit. Warranty-related costs are invariably reflected in the price to the customer; consequently, a reduction in this responsibility may result in a reduction to the price. Buyers and sellers recognize this and can negotiate an acceptable arrangement.
The FAR and the UCC also perceive warranty in unique ways, aside from the express warranties negotiated by the parties. We shall examine the UCC warranty provision for goods and the various forms of warranty found in the FAR in the course of completing this module. Focus your attention on the concepts of (1) express warranties, (2) implied warranties, (3) merchantability for a particular purpose, and (4) repair and replacement of parts.
• Part 43 Contract Modification
• Direct Material and Subcontract Costs (Under Course Resources)
Chapter 21 only!156
At any time during the course of the contract, the parties may agree to make changes to the contract. The FAR provides limits to the changes that can be performed in a contract, and the changes must be within the scope of the contract so that the Government cannot be seen as having circumvented the procurement process by adding in new work that was not competitively awarded.
In commercial contracts, however, this procurement issue is of less concern, and expediency, rather than procedure, may determine the change. So long as the parties agree, a change can occur for which an adjustment in price or schedule may be forthcoming. However, you must be aware that the right to pursue changes is not automatic in commercial contracts. This right to seek an adjustment must be included and negotiated in the contract; if either party changes any aspect of the work, the party may be working at its own risk.
Although there are many intricacies to the Changes clause of the FAR and its supplements and many variations to the types of changes that the parties can pursue in commercial contracting, the overall process follows a standard approach.
1. Either party may recognize that a change has occurred either by circumstances outside the contract or by an act of either party.
2. Either party may desire that a change occur and may request that the change in work detail be formally proposed.
The parties should strike a deal whereby the change can be formally incorporated into the contract. Note that the government’s rights to order changes are far more far reaching than would normally be tolerated in commercial contracting.

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