Chapter 5: Contract Support Execution - Processes, Policy, and Tools
Table of Visuals
- In any contingency operation, quality contingency contracting support to the commander is critical in mission accomplishment.
- The absence of direction should be interpreted as permitting innovation and the use of sound business judgment, so long as no rules are broken.
- A wide selection of contract types is available to provide the needed flexibility in acquiring required supplies and services. Many contingency purchases can be made through simplified acquisition procedures (SAP).
- Contingency contracting officers (CCOs) should emphasize price negotiations, even when competition exists, at sustained or established locations pursuant to the regulations governing the acquisition procedures used.
- The type of contract selected determines both the clauses to be included and the degree of risk accepted by the government.
- The objective is to select the contract type most appropriate for the respective acquisition that places a reasonable degree of risk on the contractor and gives the contractor the greatest incentive to perform efficiently and economically.
- E-business tools can automate processes and help deliver rapid goods and services to the end user.
- The Department of Defense (DoD) procure-to-pay (P2P) process is the same end-to-end acquisition process in contingency environments, although the acquisition flexibilities in Federal Acquisition Regulation (FAR) part 18 and Defense Federal Acquisition Supplement (DFARS) part 218 apply in contingencies, which can streamline the process.
- Joint operation areas (JOAs) may have their own acquisition instructions (AIs) and standard operating procedures (SOPs) that describe tailored processes for the respective JOA. CCOs should understand theater-specific processes and procedures before deployment when possible. They can do so by working with CCOs who are already in country.
Contingency contracting processes can differ on the basis of the size, duration, and complexity of the contingency, but mechanisms are in place to help deliver rapid contracting support to the warfighter. CCOs and all DoD officials have an ethical obligation to abide by laws and regulations, even in contingency environments when the operational tempo is high and every acquisition seems to be “priority one.” However, in the absence of clear-cut directions and theater-specific procedures, FAR 1.102-(4)(e) encourages personnel to be innovative and use sound business judgment—but not bend or break rules. The CCO needs to find ways to conduct business professionally but still be innovative, providing support expediently, efficiently, and legally.
This chapter summarizes contingency contracting execution and introduces processes, procedures, tools, and other mechanisms that can help the CCO execute the P2P process in theater and ensure expeditious delivery of supplies and services to the end user. It also summarizes the limitations on, and exceptions to, contracting operating procedures in a contingency environment. Also, specific processes common to the contingency environment are explained, including SAP, establishment of a field ordering officer (FOO) program, and use of e-business tools to automate and streamline acquisition processes. Figures 5-1 and 5-2 show basic contracting processes and contract formats, respectively.
Figure 5-1. Basic Contracting Processes
|Uniform Contract Format(a)|
Part II—Contract Clauses
Part III—List of Documents, Exhibits, and Other Attachments
Part IV—Representations and Instructions
(a) See FAR 15.204-1, Table 15-1, and 14.201-1, Table 14-1.
|Contract Format (Commercial)(a)|
(a) See FAR 12.303.
Figure 5-2. Contract FormatBack to Top
DoD’s P2P process—an established end-to-end acquisition process—encompasses the business steps necessary to obtain goods and services through contracting(1), explained in a contingency context as follows:
- Receive and accept purchase requests (PRs). The CCO manages requests for the purchase of goods or services. As mentioned in Chapter 3, the CCO should work with finance and the customer on PRs and requirements generation. All acquisition personnel should fully understand the procedures for executing PRs and defining and generating contract requirements.
- Develop procurement strategy. The CCO reviews sourcing alternatives for the goods or services requested to determine the products and services from vendor sources that best meet the requirement. Gauging the marketplace and vetting vendors is key in contingency environments. Sources of supply can be found through site surveys and use of government points of entry (GPEs) like Joint Contingency & Expeditionary Services (JCXS) and Federal Business Opportunities (FedBizOpps)(2). In the initial stages of a contingency, site surveys and vendor meetings at secure sites can help the deployed CCO.
- Award procurement instrument. Results from the execution of an approved acquisition/sourcing plan, and results in the execution of contractual documentation and legal obligation of funds. Contract awards during the initial stages of a contingency may be made using hard-copy forms (such as SF 44 and SF 1449) and the governmentwide commercial purchase card (GCPC). Electronic contract writing systems, if operational, like Procurement Desktop Defense (PD2), can help the CCO award contracts and maintain transparency of contract-related documentation. Also, JCXS features a government-to-industry portal where contract award notifications and documents can be released to vendors.
- Administer procurement instrument. Composed of monitoring the contract, agreement, or order to ensure a supplier is meeting requirements from award to physical completion, including change request management and vendor performance evaluation. This step is vital in any operation, but especially in contingencies.
- Perform receipt, acceptance, and return. Involves confirming that goods or services were delivered as ordered, any errors resolved, and formal acceptance rendered by the government. Streamlined mechanisms like the SF 44 and the 3in1 Tool can accomplish all three for cash-and-carry and field-type purchases.
- Manage procurement instrument entitlement. Includes approval of the request for payment from the commercial vendor for goods or services rendered. This step also includes requests for payment on the basis of contract terms and conditions such as financing payments. Upon approved completion, the monthly statement is authorized for payment.
- Manage disbursements. Supports all activities necessary to execute the payment process for transactions that have been authorized for payment. Payments to vendors in contingency environments can be complicated at times. CCOs should ensure vendors are paid promptly to avoid mission delays, interest payments, and requests for equitable adjustment (REAs). CCOs should be familiar with the “Accelerated payment methods” at 5 Code of Federal Regulations (CFR) 1315.5.
- Perform instrument closeout. Includes contract closeout procedures, from physical completion confirmation to archiving contracts in accordance with statutory regulations. This final step also includes the requirements for records retention. Reachback support like that provided by the Army Contracting Command-Rock Island (ACC-RI) Closeout Branch can greatly assist the CCO and streamline closeout by doing so outside the area of operations.
Figure 5-3 illustrates the P2P process.
Figure 5-3. Handshake Validation Services across the P2P End to End
For information on how the P2P, DoD policy, and electronic business (e-business) tools align, see the Department of Defense Contingency Business Environment Guidebook (CBE Guidebook).Back to Top
SAP. Contingency contracting execution for most purchases can be accomplished using SAP, as described in FAR part 13, DFARS part 213, and DFARS Procedures, Guidance, and Information (PGI) part 213. This includes procedures for the acquisition of supplies, services, and minor construction so long as the aggregate amount does not exceed the simplified acquisition threshold (SAT) for declared contingency and humanitarian or peacekeeping operations as defined in FAR 2.101.
Competition requirements under SAP. The competition requirements in FAR part 6 apply to contingencies. The CCO must promote competition to the maximum extent practicable to obtain supplies and services from the source whose offer is fair, reasonable, and most advantageous to the government. Maximum competition ordinarily can be obtained by soliciting quotations or offers from sources in the local trade area. Unless the contract action requires a synopsis pursuant to FAR 5.101 and an exception under FAR 5.202 does not apply, the CCO should consider a solicitation with responses from at least three sources to promote maximum competition. When possible, the CCO should request quotations or offers from two sources not included in the previous solicitation in accordance with FAR 13.104 procedures.
GCPC. The GCPC is the preferred method of purchasing supplies and services within the micro-purchase threshold. All purchases made or paid for by using GCPCs are subject to the applicable provisions of FAR subpart 13.2 and DFARS 213.270 and must be authorized and documented accordingly. Using the GCPC has well-known benefits, but it might not be readily accepted in many locations in a contingency situation. If the GCPC is not accepted or feasible, the 3in1 Tool or SF 44 may be used. See the DoD Government Charge Card Guidebook for Establishing and Managing Purchase, Travel, and Fuel Card Programs and other DoD GCPC policy documents at the Purchase Card Policy Documents web page.
Contracting officer GCPC use. Contracting officers may use the GCPC to support a contingency, humanitarian, or peacekeeping mission to buy immediately available supplies or services that will be delivered at one time and do not exceed the applicable SAT(3).
The SF 44 and 3in1 Tool. The SF 44 (Purchase Order-Invoice-Voucher) or 3in1 Tool (required when automating the SF 44 process) can be used by CCOs and FOOs to make cash-and-carry (one delivery, one payment) purchases at or below the established micro-purchase threshold, or if made by warranted CCOs in declared contingency operations, the SAT. See FAR 13.306 and DFARS 213.306 for more information on SF 44. The 3in1 Tool automates the SF 44 field order, receipt, and purchase process. No other electronic tool can be used to fulfill the same capabilities as 3in1 in accordance with PGI 218.272(c). CCOs must be familiar with the 3in1 Tool, its capabilities, and how to use the tool in theater as it greatly improves simplified acquisition in contingency environments. (See the CBE Guidebook for more information and guidance on the 3in1 Tool.)
Imprest fund and third-party drafts(4). These instruments are cash funds of a fixed amount. Imprest funds and third-party drafts are not standard DoD instruments and normaly require special approval as stated in DFARS 213.305-3, "Conditions of Use." However, imprest funds are authorized for use without further approval for overseas transactions at or below the micro-purchase threshold in support of a contingency operation or humanitarian or peacekeeping operation. CCOs should use these instruments as a last resort given the significant security requirements for obtaining the money. SF 44 and GCPCs generally have eliminated the need for imprest funds.Back to Top
As described in FAR 16.101, a wide selection of contract types are available to the CCO, providing the flexibility needed to acquire the large variety and volume of supplies and services required in contingency environments. Contract types vary according to the following factors:
- Degree and timing of the responsibility assumed by the contractor for the costs of performance
- Amount and nature of the profit incentive offered to the contractor for achieving or exceeding specified standards or goals.
Contract types fall into three broad categories: fixed-price contracts (FAR subpart 16.2), where the contractor carries full responsibility and risk for the performance costs and the resulting profit or loss; cost-reimbursement contracts (FAR subpart 16.3), which provide for payment of allowable incurred costs to the contractor; and time and materials (T&M) or labor-hour (LH) contracts (FAR subpart 16.6), which provide for the acquisition of supplies or services on the basis of direct labor hours at specified fixed hourly rates. In addition, in a number of incentive contracts (FAR subpart 16.4), the contractor’s responsibility for performance costs and for the offered profit or fee incentives is tailored to the uncertainties involved in contract performance. Moreover, in some situations, the government benefits from negotiating master indefinite delivery contracts for supplies or services (FAR subpart 16.5), with specific requirements detailed later in specific task or delivery orders.
Noncompetitive contracting, cost-reimbursable contracts, and T&M and LH contracts pose special risks of overspending. DoD has received specific guidance to reduce the use of these high-risk contract authorities, as specified in Office of Management and Budget (OMB) Memorandum M-09-25, “Improving Government Acquisition.”
As described in FAR subpart 16.2, under a fixed-price contract, the government must describe exactly the required contract results and give the contractor the flexibility to plan, manage, and execute the work to achieve those results. This type of contract has tremendous advantages because the performance and cost risks lie with the contractor. Contract types commonly used in a contingency environment are as follows:
- Firm-fixed-price (FFP) contract
- Fixed-price contract with an economic price adjustment
- Fixed-price incentive contract, with determination and finding (D&F) required.
As described in FAR 16.202-1, an FFP contract specifies a price that is not subject to any adjustment on the basis of the contractor’s cost experience in performing the contract. This contract type specifies that the contractor assumes maximum risk and full responsibility for all costs and resulting profit or loss. An FFP contract gives the contractor maximum incentive to control costs and perform effectively and imposes a minimum administrative burden on the government. An FFP contract may include an award fee incentive (FAR 16.404) or performance or delivery incentives (FAR 16.402-2 and 16.402-3) when the award fee or incentive is based solely on factors other than cost. The contract is still an FFP contract when such incentives are used. FFP contracts are suitable under the following conditions:
- Price competition is adequate.
- The prices of previous purchases of the same or similar supplies or services—made on a competitive basis or supported by valid cost or pricing data—are available.
- Available cost or pricing information permits realistic estimates of the probable costs of performance.
- Performance uncertainties can be identified, reasonable estimates of their cost impacts can be made, and the contractor is willing to accept an FFP contract, along with the associated assumption of the risks involved.
(Construction contracting is generally executed using FFP contracts (FAR 36.207).
In contingency environments, CCOs generally do not execute cost-type efforts as often as FFP efforts. These contracts, as stated in FAR subpart 16.3, include an estimate of total cost for the purpose of obligating funds and establishing a ceiling that the contractor cannot exceed (except at its own risk) without the approval of the contracting officer. Cost-reimbursement contracts generally are labor intensive and require additional scrutiny of the contractor’s cost accounting system; however, they have their purpose. CCOs should use this type of contract only when uncertainties in contract performance do not permit costs to be estimated with sufficient accuracy to justify the use of any type of fixed-price contract. Consequently, this type of contract generally entails larger dollar values, more complex requirements, and external support. Cost-reimbursement contracts also are limited by mandatory contractor certification and accreditation requirements: they must have a certified cost accounting system and a certified purchasing system in order to be awarded a cost-reimbursement contract. The Defense Contract Audit Agency (DCAA) and Defense Contract Management Agency (DCMA) are the certification authorities for these systems, respectively(5).
T&M and LH Contracts
CCOs are least likely to execute this type of contract. They require a D&F (approved by the head of an agency) from the CCO that no other contract type is suitable, and the contract includes a ceiling price that the contractor exceeds at its own risk (FAR 16.601). As described in FAR subpart 16.6, under a T&M or an LH contract, the contractor agrees to provide its best efforts to accomplish a specific requirement for services at predetermined hourly rates for the categories of labor to be performed. In T&M contracts, but not LH contracts, the contractor is reimbursed for the actual costs of any materials or other direct costs required to perform the work. T&M and LH contracts call for periodic payments for the actual labor performed, using the labor category rates in the contract, which include all direct labor, associated indirect costs, and an amount for profit. In addition, to the extent that materials or other direct costs are incurred in providing the services, the contractor is reimbursed at actual cost, up to the ceiling amount noted in the contract or order. T&M and LH contracts can be particularly useful and appropriate in contingency contracting situations when the need for services is clearly understood but the particular parameters of the required labor or materials cannot be definitively established at the time of contract award.
Indefinite Delivery Contracts
The three types of indefinite-delivery contracts are definite-quantity, indefinite-quantity, and requirements contracts (FAR subpart 16.5 and DFARS subpart 216.5). These types of contracts can prove valuable to CCOs in contingency environments given the potential for unknown delivery time and quantities during initial operations.
Definite-quantity contracts. As described in FAR 16.502, a definite-quantity contract provides for the delivery of a definite quantity of specific supplies or services for a fixed period, with deliveries or performance scheduled at a designated location, time, and date after the order is placed. A definite-quantity contract may be used when the following can be determined in advance:
- A definite quantity of supplies or services will be required during the contract period.
- The supplies or services are regularly available or will be available after a short lead-time.
Indefinite-quantity contracts. As described in FAR subpart 16.5 and DFARS subpart 216.5, an indefinite-quantity contract may be used when the government cannot predetermine, above a specified minimum, the precise quantities of supplies or services that it will require during a fixed contract period, so it is inadvisable for the government to commit itself to procuring more than a minimum quantity. Such quantity limits can be stated as number of units or as dollar values. The contracting officer should use an indefinite-quantity contract only if a recurring need is anticipated.
Indefinite-quantity contracts are characterized as follows:
- The contract must require the government to order—and the contractor to furnish—at least a stated minimum quantity of supplies or services. If an order is placed, the contractor must furnish any additional quantities, not to exceed the stated maximum.
- The contracting officer should establish a reasonable maximum quantity on the basis of market research, trends on recent contracts for similar supplies or services, a survey of potential users, or any other rational basis.
- To ensure that the contract is binding, the minimum quantity must be more than a nominal quantity, but it should not exceed the amount the government is fairly certain to order.
- The contract may also specify maximum or minimum quantities the government may order under each task order or delivery order and the maximum quantity that it may order during a specific period.
Requirements contracts.As described in FAR 16.503, a requirements contract is an indefinite-delivery contract that provides for filling all of the actual purchase requirements for specific supplies or services of designated activities during a specified contract period, with deliveries scheduled by the timely placement of orders with the contractor.
The advantages of this type of contract include the following:
- They have the flexibility to support deployment without the financial risk and administrative burden that an indefinite-delivery contract imposes. The activity orders only the needed supplies or services when they are needed and pays only upon acceptance. Funds are obligated only when the government issues a delivery order
against the contract.
- The contract price can be on the basis of an FFP or cost-reimbursement determination. The agreed-upon prices can be derived from catalog or market prices.
- If the government no longer requires the supplies or services covered by the contract, the contractor has the burden of proving whether additional compensation is warranted. The maximum and minimum order quantity limitations are included in the original contract. The better the customer defines its needs up front, the better the resulting competition and prices.
- The CCO should perform a spend analysis of known requirements to determine the categories of supplies and services that might be suitable for a centralized contract. One approach would be reviewing the number of simplified acquisition actions for the same items.
Letter contracts and undefinitized contract actions. As described in DFARS 217.74, undefinitized contract actions (UCAs) are any contract actions for which the contract terms, specifications, or prices are not agreed upon before performance begins. Examples include letter contracts, basic ordering agreements, and provisioned item orders when the price is not agreed upon before performance begins. The CCO should be mindful of local policy and procedures that may provide additional information on letter contracts. For example, in the September 2014 version of the U.S. Central Command Joint Theater Support Contracting Command (C-JTSCC) AI, letter contracts were not authorized for the designated area of operations.Back to Top
The CCO decides on the type of contract to use depending on the facts surrounding the individual acquisition. The objective is to select the contract type that places a reasonable degree of risk on the contractor and gives it the greatest incentive to perform efficiently and economically. The CCO must consider the factors in FAR 16.104 as well as the stability, complexity, and predictability of the requirement, specificity of the work description, records of the available contractors, and general acquisition environment. The CCO must document in the contract file the rationale for the contract type selected.
Commerciality of the requirement. As described in FAR 12.207, when acquiring a commercial item, the CCO should consider a number of factors, including the following:
- Most often, the CCO must use an FFP contract or fixed-price contract with an economic price adjustment (FAR 12.207(a)).
- To protect the government’s interests, the CCO should assess each purchase of commercial items and services to determine whether to use a unilateral or bilateral contractual instrument.
- The CCO may use a T&M or LH contract under certain circumstances if the determination is made that no other authorized contract type is suitable (FAR 12.207(b)).
When assessing unilateral and bilateral options, the CCO should consider factors such as the following:
- Business and cultural environment.Commercial practices vary among countries. Market research can clarify the risk associated with local commercial practices and the protection required to maintain the government’s interests (FAR 10.002(b)).
- Nature of the requirement and impact on the mission. A unilateral purchase order is an offer by the government to a contractor. The contractor is not obligated to perform. A binding agreement is created when the contractor begins performance. A bilateral signature makes the agreement binding for both parties (FAR 13.004(b)).
- Order amount, contractor financial capabilities, and potential impact on mission (if order is not filled).
- Simplified acquisition. When using SAPs, purchase orders are normally FFP.
- Unpriced orders. Pursuant to FAR 13.302-2, unpriced purchase orders can be used in certain situations when it is impossible for the CCO to obtain firm pricing before issuing the purchase order. Whenever the CCO uses an unpriced order, it must include a dollar limit on the government’s obligation, and the contracting officer must follow up to ensure timely pricing.
- Negotiation. When using the negotiation procedures prescribed in FAR part 15, the CCO may use any contract type (or combination of contract types) that promotes the best interests of the government, so long as the specific limitations in FAR part 16 are met. CCOs must only use authorized contract types in accordance with the FAR and respective FAR supplements or authorized by agency regulation or a FAR deviation. Negotiation is a common method of doing business in the world, and the CCO should understand the appropriate contract type for the respective negotiation.
- Cost risk. CCOs should assess cost risk and the possible monetary loss or gain with regard to contractor performance. The cost risk element is considered when negotiating a fair and reasonable price and when determining the appropriate contract type to use. Requiring contractors to accept unknown or uncontrollable cost risk can endanger contract performance, substantially reduce competition, or substantially increase contract price. To realistically choose the proper contract type to meet a specific contract situation, CCOs must consider the proper allocation of cost risk. (See FAR 16.103.)
- Performance risk. Most contract cost risk is related to contract requirements and the uncertainty surrounding contract performance—the lower the uncertainty is, the lower the risk. Therefore, the appraisal of cost risk should begin with an appraisal of performance risk. For larger, more complex contracts, the CCO likely will need assistance from other members of the government acquisition team (such as representatives from the requiring activity, engineering staff, contracting, and program or project management). Relevant considerations include the following:
- Stability or clarity of the contract specifications or statement of work
- Type and complexity of the item or service being purchased
- Availability of historical pricing data
- Previous experience in providing required supplies or services
- Urgency of the requirement
- Contractor technical capability and financial responsibility
- Extent and nature of proposed subcontracting.
- Market risk. Changes in the marketplace affect contract costs. Preferred acquisition practice calls for forward pricing of contract efforts because it provides a baseline the CCO and contractor can use to measure cost or price performance against contract effort. Forward pricing requires the contracting parties to make assumptions about future changes in the marketplace. A volatile market increases the cost risk involved in contract pricing, particularly when the contract period extends several years. What will material and labor cost years from now? Will material shortages occur years from now? If these unknown costs are significant, the length of the contract becomes an important consideration in the selection of contract type. A fixed-price contract with an economic price adjustment is designed specifically to reduce this market risk for contractors.
Definition. As described in FAR 1.701, a D&F is a special form of written approval by an authorized official that is required by statute or regulation as a prerequisite to taking certain contract actions. The determination is a conclusion or decision supported by the findings, which are statements of fact or rationale that are essential to support the determination and must cover each requirement of the statute or regulation.
General. As described in FAR 1.702, a D&F ordinarily is for an individual contract action. Unless otherwise prohibited, class D&Fs may be executed for classes of contract actions (FAR 1.703). The approval granted by a D&F is restricted to the proposed contract action, as reasonably described in that D&F. D&Fs may provide a reasonable degree of flexibility. Furthermore, in the application of D&Fs, reasonable variations in estimated quantities or prices are permitted unless the D&F specifies otherwise.
Some of the more common general D&Fs address type of contracting action, exercising of an option, extension of period of performance, and ratification. When an option is anticipated, the D&F states the approximate quantity to be awarded initially and the level of the increase permitted by the option. (Sample D&Fs are available on the Defense Contingency Contracting Handbook website.)
Class D&F. As described in FAR 1.703, CCOs must be aware of any class D&Fs for their area of responsibility (AOR). A class D&F provides authority for a class of contract actions. A class may consist of contract actions for the same or related supplies or services (or other contract actions that require essentially identical justification).
Important D&F considerations include the following:
- The findings in a class D&F must fully support the proposed action, either for the class as a whole or for each action. A class D&F is for a specified period, with the expiration date stated in the document.
- The contracting officer ensures that individual actions taken pursuant to the authority of a class D&F fall within the scope of the D&F.
- Expiration dates are required for class D&Fs and are optional for individual D&Fs. (See FAR 1.706 for more information on D&F expiration dates, and see FAR 1.704 for D&F content.)
Supersession and modification. As described in FAR 1.705, D&Fs function as follows:
- If a D&F is superseded by another D&F, that action does not render invalid any action taken under the original D&F before the date on which it was superseded.
- The contracting officer does not need to cancel a solicitation if the D&F, as modified, supports the contract action.
Signatory authority. As described in FAR 1.707, when a D&F is required, the appropriate official signs it in accordance with agency regulations. Authority to sign (or delegate signature authority for D&Fs) is specified in the applicable parts of the FAR.Back to Top
Justification and approval (J&A) for other than full and open competition. When using procedures other than those for full and open competition, the contracting officer must complete a thorough written justification in accordance with FAR 6.303, explaining the reasons for proceeding with the award of a contract without full and open competition. The CCO must also ensure that a fair and reasonable price is achieved. This justification must be approved by the approval authorities, as specified in FAR 6.304, within established J&A thresholds. The CCO should be familiar with the deployed agency’s thresholds and should know when legal review of the J&A is required. Further, legal can provide interpretations before contract action review to ensure any decision to restrict competition is legally sufficient.
New contracts and modifications are exempt from the requirements in FAR part 6 (if the requirements in FAR 13.501 apply), but CCOs must still prepare sole-source justifications for sole-source (including brand-name) acquisitions or portions of an acquisition requiring a brand-name. Documentation requirements apply to cases where only one source is solicited, and the use of the format of J&As is required for FAR subpart 13.5 procurements where only one source is solicited.
Exceptions apply to contract actions or modifications that are not exempt from the requirements for full and open competition. The most commonly used exception in a deployed environment is unusual and compelling urgency. The CCO must be familiar with the complete list of FAR exceptions, noted as follows in FAR 6.302:
- Only one responsible source (sole source) and no other supplies or services will satisfy agency requirements (FAR 6.302-1).
- The unusual and compelling urgency (see FAR 6.302-2) authority is when an unusual and compelling urgency precludes full and open competition and a delay in contract award would result in serious financial hardship or injury to the government. CCOs should note (1) unusual and compelling requirements are not to be confused with sole-source requirements (FAR 6.301 (c)(1)), and (2) CCOs are warned against contracting without providing for full and open competition because of a lack of advance planning by the requiring activity or because of concerns related to the level of funds available (for example, expiring funds).
- Industrial mobilization; engineering, developmental, or research capability; or expert services (FAR 6.302-3).
- International agreement (FAR 6.302-4).
- Statutory authorization or requirement (FAR 6.302-5).
- National security (FAR 6.302-6).
- Public interest (FAR 6.302-7).
When unusual and compelling urgency is the basis for using procedures other than those for full and open competition, the written J&A may be made after contract award if the preparation and approval of the J&A before award would unreasonably delay the acquisition (FAR 6.302-2(c)(1)). Contracts awarded under this circumstance should include an appropriately limited period of performance, with follow-on contracts awarded on the basis of full and open competition or the submission of cost or pricing data for sole-source awards.
Class J&As. As prescribed in FAR 6.303-1(d), class justifications and international agreement competitive restriction (IACR) documents may be used in certain circumstances. For example, they may be used when citing similar justification authority for a group of related contract actions for the same or related supplies or services. Information that is the same for multiple contracts need not be restated for each. CCOs must be aware of the class J&As and IACRs for their AORs.Back to Top
Pursuant to FAR subpart 7.4, CCOs should decide whether to lease or purchase equipment on the basis of a case-by-case evaluation of comparative costs and other factors. At a minimum, CCOs should consider the following (in addition to applying 10 United States Code (U.S.C.) Section 2401 statutory authorization requirements to the lease of a vessel, aircraft, combat vehicle or commercial vehicle, and associated equipment):
- Estimated period the equipment will be used and the extent of use during that period
- Financial and operating advantages of alternative types and makes of equipment
- Cumulative rental payments for the estimated period of use
- Net purchase price
- Transportation and installation costs
- Maintenance and other service costs
- Potential obsolescence of the equipment because of imminent technological improvements.
The CCO should consider the following additional factors, as appropriate, depending on the type, cost, complexity, and estimated period of use of the equipment:
- Availability of purchase options
- Potential for use of the equipment by other agencies after its use by the acquiring agency
- Trade-in or salvage value
- Imputed interest
- Availability of a servicing capability (the ability of the equipment to be serviced by the government or other sources if purchased), especially for highly complex equipment.
Leases—either capital or operating—should be funded in accordance with DoD Financial Management Regulation (FMR) 7000.14-R. Procurement funds are used for capital leases, which are essentially installment purchases of property. If a lease is justified, a lease with option to purchase is the preferred acquisition method (FAR 7.402(b)(2)).Back to Top
Publication of contract actions. Pursuant to FAR 5.002, contracting officers are required to publicize contract actions to increase competition unless the contracting officer determines that an exception applies pursuant to FAR 5.202(a). The contracting officer’s determination must be filed accordingly. To publicize contract actions, CCOs should at least post in a public place a notice of all unclassified solicitations for goods and services to support the contingency operation.
Synopsis of requirements in FedBizOpps. A CCO can unilaterally determine that a particular requirement does not need to be synopsized in FedBizOpps under 14 specific exceptions (FAR 5.202(a)). In a contingency or humanitarian situation, the most commonly used exception applies when the proposed action will be made and performed outside the United States and its outlying areas and only local sources will be solicited. However, the CCO should carefully consider whether one of the other exceptions might apply to the proposed action before proceeding with a synopsis. Local contracting organization policies might require some form of posting or prior notification to potential offerors or bidders, even if the proposed action does not require a synopsis in FedBizOpps.
Synopsizing using the Joint Contingency & Expeditionary Services. If the JCXS is operational in the respective area of operations, the Joint Contingency Contracting System (JCCS) application within JCXS can be used to publicize requirements. CCOs should consult senior contracting leadership for the proper e-business systems to use for synopsizing (and soliciting) requirements in contingency environments in a designated AOR. See the CBE Guidebook for more information on JCXS.
Oral solicitations. Oral solicitations or verbal requests for proposals (RFPs) can be of value in contingency environments, especially at the onset; however, they are rare. Oral solicitations are authorized when a written solicitation would delay the acquisition of supplies or services—such as perishable items, support of contingency operations, or other emergency needs—to the detriment of the government, and a solicitation notice is not required under FAR 5.202. This technique does not excuse the CCO from complying with all other statutory and regulatory requirements. Oral solicitations are typically a last resort because of potential associated problems, and they require immediate follow-up in writing. CCO documentation also must provide a sufficient rationale for the use of an oral solicitation.
The contract file must include the following:
- Justification for use of an oral solicitation
- Item description, quantity, and delivery schedule
- Sources solicited, including the date, time, name of the person contacted, and prices quoted
- Solicitation number provided to prospective offerors.
Once the CCO completes the oral solicitation and selects an offeror, a contract is prepared as quickly as possible for the contractor’s signature. Delay might require further explanation in the contract file that describes the rationale for failing to take prompt action. Sample contract formats, electronic prepopulated forms, and electronic copies of the required clauses in the contingency contracting support kit accelerate the contracting documentation process.Back to Top
Buy American Statute. The Buy American Statute restricts the purchase of supplies that are not domestic end products for use in the United States. The Buy American Statute does not apply to articles, materials, and supplies for use outside of the United States, its possessions, Puerto Rico, and other sites subject to its jurisdiction (FAR 25.001(a)(1)). A foreign end product may be purchased if the contracting officer determines that the price of the lowest-cost domestic offer is unreasonable. In view of this exception, most overseas acquisitions to support a foreign contingency operation are not subject to the Buy American Statute and the implementing regulations at FAR subparts 25.1 and 25.2.
Balance of Payments Program. This program applies to purchases of supplies or construction for use outside of the United States. The program institutes a preference for domestic (U.S.-made) products and construction materials. Exceptions to the program are specified in DFARS 225.75. A foreign end product may be acquired for use outside of the United States—or a foreign construction material may be used in construction outside of the United States—without regard to the restrictions of the Balance of Payments Program if the following conditions are met:
- The estimated cost of the end product does not exceed the SAT.
- The end product or construction material is listed at FAR 25.104, or the head of the contracting activity (HCA) determines that the requirement (1) can only be filled by a foreign end product or construction material (FAR 25.103(b)); (2) is for end products or construction materials that, by their nature or as a practical matter, can be acquired only in the geographic area concerned (such as ice or bulk material such as sand, gravel, or other soil material; stone; concrete masonry units; or fired brick); or (3) is for perishable subsistence products and delivery from the United States would significantly impair their quality at the point of consumption.
- The acquisition of foreign end products is required by a treaty or executive agreement between governments or laws passed supporting buy local first programs.
- The end products are petroleum products or products for commissary resale.
- The end products are eligible products subject to the Trade Agreements Act, North American Free Trade Agreement (NAFTA), or Israeli Trade Act, or the construction material is subject to the Trade Agreements Act or NAFTA.
- The cost of the domestic end product or construction material (including transportation and handling costs) exceeds the cost of the foreign end product or construction material by more than 50 percent.
- The head of the agency has determined that it is not in the public interest to apply the restrictions of the Balance of Payments Program to the end product or construction material or that it is impracticable to apply the restrictions of the Balance of Payments Program to the construction material.
Trade Agreements Act. The Trade Agreements ActAct (19 U.S.C. 2501 et seq. and FAR subpart 25.4) authorizes the President to waive the Buy American Statute and other discriminatory provisions for eligible products from countries that have signed an international trade agreement with the United States or that meet certain other criteria, such as having least-developed-nation status. The President has delegated this waiver authority to the U.S. trade representative.
FAR 25.401 lists all designated countries to which the Trade Agreements Act applies. The Trade Agreements Act does not apply to the following:
- Purchases of supplies below the dollar threshold established by the U.S. trade representative (FAR 25.402(b))
- Purchases of arms, ammunition, or war materiel
- Construction contracts valued at less than established dollar threshold
- Some service contracts (FAR 25.403(c))
- Purchase from foreign sources that is restricted by the DoD Annual Appropriations or Authorization Act. (DFARS 225.401-70 identifies all products to which the act applies.)
Berry Amendment. As required in DFARS 225.7002, CCOs must comply with the Berry Amendment. Unless a specific exception in law applies, the following products, components, or materials must be grown, reprocessed, reused, or produced wholly in the United States if they are purchased with funds made available (but not necessarily appropriated) to DoD (DFARS clause 252.225-7012):
- Clothing and the materials and components thereof, other than sensors, electronics, or other items added to, and not normally associated with, them(6)
- Tents and structural components of tents, tarpaulins, or covers
- Cotton and other natural fiber products
- Woven silk or woven silk blends
- Spun silk yarn for cartridge cloth
- Synthetic fabric, and coated synthetic fabric, including all textile fibers and yarns that are for use in such fabrics
- Canvas products
- Wool (whether in the form of fiber or yarn or contained in fabrics, materials, or manufactured articles)
- Any item of individual equipment (Federal Supply Class 8465) manufactured from or containing the fibers, yarns, fabrics, or materials listed here.
DFARS 225.7002-2 explains Berry Amendment exceptions, several of which may apply in a deployed environment.
The DFARS clauses pertaining to the Berry Amendment must be included in DoD solicitations, such as invitations for bids (IFBs) or RFPs, and DoD contracts. If the cited clause is included in a solicitation or contract, the Berry Amendment restrictions apply to that procurement. FAR subpart 25.5 provides comprehensive procedures for offer evaluation and examples.
Synchronized Predeployment and Operational Tracker (SPOT). SPOT is the U.S. Government system of record for contractor and contractor personnel accountability and visibility. CCOs must understand their duties pertaining to SPOT and must ensure the contractor understands their SPOT obligations. This helps ensure contractor accountability in theater, extremely important to mission success. Per DFARS clause 252.225-7040(g), SPOT is mandated for all contractors authorized to accompany the forces (CAAF) serving in a declared contingency or humanitarian or peacekeeping operation (or in other military operations or exercises) when designated by the combatant commander. CAAF may include U.S. citizens, U.S. legal aliens, third-country nationals, local nationals who reside with U.S. forces, and others as required by each combatant command (CCMD). Additional information on SPOT, including information and supporting systems under the SPOT-Enterprise Suite (SPOT-ES), authorities, policies, business rules, and training, is available at the SPOT website. CCOs should know this website and the SPOT-ES. CCOs should enforce compliance with SPOT business rules found in DoD Business Rules for the Synchronized Predeployment and Operational Tracker (SPOT).
Theater business clearance (TBC) and contract administration delegation (CAD). TBC/CAD is an acquisition support process designed to give joint force commanders (JFCs) and senior contracting leadership visibility over all contracts and contractors performing work in their AORs. TBC/CAD is a clearance process that ensures theater-specific mandatory and unique requirements are included in solicitations (and therefore contractor proposals) and contracts at the pre-award and award phases. CAD allows the CCDR to control the assignment of contract administration for the portion of contracted effort that relates to performance in, or delivery to, designated operational areas. It also allows the CCDR to oversee contractor compliance with directed policies. CCOs should understand the role the CCMD Operational Contract Support Integration Cell (OCSIC) plays in planning, developing, and coordinating TBC implementing guidance if TBC measures are directed. CCOs should determine before deployment whether a formal TBC/CAD process has been established and, if so, work to fully understand the requirements and ensure they are executed properly. See Joint Publication (JP) 4-10 for more information.
Defense Base Act (DBA) insurance. DBA insurance is required in solicitations and contracts when the Defense Base Act applies (FAR 28.305), and (1) the contract will be a public-work contract performed outside the United States, or (2) the contract will be approved or financed under the Foreign Assistance Act of 1961 (Pub. L. 87-195) and is not excluded by FAR 28.305(b)(2), regardless whether the personnel performing those services have CAAF status. In addition, before personnel with CAAF status can deploy, the DBA insurance information block in SPOT must include a valid policy or binder number. Contractors are not authorized to perform U.S. Government contracts without the proper insurance. (Additional information on DBA is available at the Department of Labor’s Defense Base Compensation web page.Back to Top
Wide Area Workflow (WAWF) eBusiness Suite. The WAWF suite is a secure, web-based system for government contractors and authorized DoD users for generating, capturing, and processing receipt and payment documents. WAWF has many different resident applications, including the Contracting Officer Representative Tracking (CORT) Tool, Electronic Document Access (EDA) application, and iRAPT (an invoicing, receipt, and property transfer application, which allows the government to assign many different roles and establish an acceptance and invoice routing method). WAWF enables electronic submission of contractor invoices, as well as government inspection and acceptance documents (DFARS 232.7002).
Contractors submit payment requests and receive reports in electronic form, except for
- purchases paid for with a GCPC;
- awards to foreign vendors for work performed outside the United States;
- classified contracts or purchases when electronic submission and processing of payment requests could compromise the safeguarding of classified information or national security;
- contracts awarded by deployed contracting officers in the course of military operations, including contingency operations as defined in 10 U.S.C. 101(a)(13); humanitarian or peacekeeping operations, as defined in 10 U.S.C. 2302(7); or contracts awarded by contracting officers in the conduct of emergency operations, such as responses to natural disasters or to national or civil emergencies;
- purchases to support unusual or compelling needs of the type described in FAR 6.302-2;
- cases in which DoD is unable to receive payment requests or provide acceptance in electronic form; or
- cases in which the contracting officer who administers the contract for payment has determined, in writing, that electronic submission would be unduly burdensome to the contractor.
Payment in local currency. As described in FAR 25.1002, CCOs must determine whether the respective contract requires local currency or U.S. currency, unless an international agreement or the World Trade Organization (WTO) Government Procurement Agreement (GPA) requires a specific currency. For currency conversions, CCOs can use the Currency Converter. This help them ensure adequate funds are available to cover currency fluctuations to avoid a violation of the Anti-Deficiency Act (31 U.S.C. 1341, 1342, 1511–1519) when the contract is priced in foreign currency. Using electronic funds transfer (EFT) when paying vendors and contractors is a preferred practice. Currency exchange rates are available from the local finance office or the Bureau of the Fiscal Service website.
Contingency contracting officer currency declaration. As noted in FAR 25.1002, the contracting officer has the authority to determine whether the contract will be priced in U.S. dollars or the local currency. CCOs must include in the contract the exchange rate to be used for converting the contract price from U.S. dollars to the local currency—even in austere environments. (For example, see DFARS 232.72.)
One of the CCO’s functions is to help stabilize the local economy. An influx of U.S. dollars often works against this goal by devaluing the local currency. Before placing overseas contracts in U.S. dollars, the CCO should discuss the subject with the embassy, host nation liaison office, staff judge advocate, and accounting and finance office.
Choice of law. Per DFARS 233.215-70, each contract awarded in a foreign country in support of a contingency operation should contain a contract clause stating that U.S. laws apply to the contract, the contract will be interpreted in accordance with U.S. laws, and all disputes under the contract will be handled in accordance with the disputes clause of the contract.Back to Top
Negotiating practices. Much of the business conducted by contractors overseas is accomplished through negotiation. When setting the price of an item, CCOs should keep in mind that the first price quoted is usually only a starting position for negotiations. CCOs who deal with foreign contractors know that most of them can be shrewd negotiators. CCOs should consider negotiating for lower prices as a normal and necessary business practice. For supplies, services, and construction, experience has shown that prices drop dramatically when discussions are initiated with an offeror. The CCO’s bargaining position is enhanced when the product or service is available elsewhere or the requirement is not urgently needed. However, if the reverse is true—and the contractor is aware that the product or service is unavailable or the requirement is urgent—the CCO may be hard pressed to negotiate a better deal.
Price negotiation memorandum. The business culture in most deployed locations relies on price negotiations. CCOs should emphasize price negotiations, even if competition exists, at sustained or established locations. In awarding negotiated contracts, contracting officers should always engage in aggressive negotiations on the basis of renegotiation objectives (FAR 15.405). All negotiation results must be documented in a price negotiation memorandum (PNM) and properly filed (FAR 15.406-3).
Certified cost or pricing data. The award of any negotiated contract (or the modification of any contract) that exceeds $700,000 requires the contractor to submit certified cost or pricing data unless one of the exemptions to the requirement for certified cost or pricing data applies (FAR 15.403-4(a)(1)). The CCO can seek a waiver if it has a reasonable basis. When the certificate of cost or pricing data is required, offerors must complete the certificate form available at FAR 15.403-4(b)(2).
Per FAR 15.403-1(b), contracting officers are not required to obtain certified cost or pricing data from offerors under the following conditions:
- Acquisition is at or below the SAT.
- Prices are on the basis of adequate price competition (two or more responsible offerors responded).
- Commercial items are being acquired.
- A contract or subcontract for commercial items is being modified.
- Prices are set by law or regulation.
- A waiver has been obtained (only for contracts in excess of $700,000).
Independent government estimate (IGE). A key part of price determination, IGEs generally are used for commercial items, supplies, equipment, and simple services routinely available on the open market at competitive prices. They help ensure the government has thought through the acquisition requirements and cost elements before award. Price or cost estimates are required for all contracts anticipated to exceed the SAT and must be independently developed, on the basis of a comparison and analysis of factors such as historical prices paid and market survey information. The IGE usually is developed by the requiring unit and is used to establish a realistic price or cost. The IGE is also a critical component of negotiation and formulating the government’s negotiation position. IGEs ultimately help in negotiating a fair and reasonable price. Ensure your customer understands the importance of establishing pricing with proper research. The customer owns the requirements and therefore must provide an IGE to support your effort to provide the best value to the government and taxpayer.
Responsible prospective contractor and vendor vetting. Per FAR 9.103(a), contracts may be awarded only to responsible prospective contractors. A responsible contractor is an entity that meets the criteria in FAR 9.104-1. The CCO is responsible for researching a contractor and determining whether it is responsible. Prospective contractors must be registered in the System for Award Management (SAM) database before award of a contract or agreement, unless one of the exceptions at FAR 4.1102 applies (for contracts awarded by deployed CCOs in support of contingency or humanitarian or peacekeeping operations). The Contractor Performance Assessment Reporting System (CPARS) and the Federal Awardee Performance and Integrity Information System (FAPIIS) can aid the CCO in researching contractor responsibility. Also, approved host nation business advisors can render valuable insight into responsible local vendors. The CCO, through the appropriate chain of command, can work with the HCA, the local embassy, and the State Department to establish a responsible local vendor base. The following general standards apply:
- Adequate financial resources (or the ability to obtain them) needed to perform contract work (FAR 9.104-1(a)).
- Ability to comply with the delivery schedule (FAR 9.104-1(b)).
- Satisfactory performance record (FAR 9.104-1(c)). Additional information on contractor performance records and evaluation of such information can be found at FAR 9.104-3(b) and FAR subpart 42.15. CCOs should note that contractor responsibility shall not be determined solely on the basis of a lack of relevant performance history, except as provided in FAR 9.104-2.
- Satisfactory record of integrity and business ethics (FAR 9.1041(d)).
- Necessary organization, experience, accounting, operational controls, and technical skills required to perform contract work (FAR 9.104-1(e)).
- Necessary production, construction, and technical equipment (or the ability to obtain them) (FAR 9.104-1(f)).
- Eligibility to receive the award (FAR 9.104-1(g)).
- Lack of contractor insurance and other protections, including any necessary reinsurance agreements, can negatively impact contract execution in the designated area of operations.
The CCO must be familiar with agency vendor vetting procedures for the theater of operations supported. Local AIs and SOPs, if and when developed, normally provide specific procedures for determining whether prospective contractors are responsible and have been adequately vetted, validated, and approved. For example, in Afghanistan, the CJTSCC SOP subpart 5104.200 provides specific vendor vetting and installation access procedures. The SOP also directs the use of the JCCS to record vendor registrations and assign risk ratings. CCOs should discuss vendor vetting with senior contracting leadership if no established SOP or AI contains tailored information for the respective AOR.
Check for excluded, debarred, and restricted sources. CCOs must check the Excluded Parties List System (EPLS), a function of the SAM system, for exclusions before opening proposals or bids and again before award. CCOs should also check the “Identified Enemies List,” as required by the National Defense Authorization Act (NDAA) FY12 (Section 841) and NDAA FY14 (Section 831). If Internet connectivity is down, CCOs can contact the nearest embassy or contracting activity for assistance. Also, CCOs should ensure local vendor vetting procedures are followed, if developed, and e-business tools, like JCXS, are used pursuant to DoD regulations and local AIs or SOPs.
Protect your contractors. CCOs are responsible for safeguarding contractor information. In some cases, the safety of contractor personnel depends on you and your vigilance to keep their information safe. In certain deployed locations, CCOs must not advertise contractors that have won awards, including e-mail address, physical address, and names of employees. Upon arrival in the AOR, the CCO will be informed whether these strict information safeguards apply to the deployed location.
Host-nation-first programs. Host-nation-first programs leverage contracting resources to promote economic expansion, employment, and skills development for indigenous populations. CCOs must understand the specifics of the host-nation-first program if active in the respective operational area, whether the program allows for direct award to local vendors, the use of socioeconomic information—where the winning contractors must maximize the employment, training, and transfer of knowledge, skills, and abilities to the local workforce—or some other allowance, as part of the source selection process. This is part of the campaign for building trust and establishing habitual relationships, and it is a valuable counter-insurgency strategy that can be used worldwide. The CCO should determine whether such a program has been established in the AOR. For example, DFARS 225.7703 allows for enhanced authority to acquire products or services from Afghanistan.
DFARS Procedures Guidance and Instruction (PGI) 225.7703 provides acquisition procedures and D&F requirements for use when using the AFI enhanced authority. CCOs should become familiar with local AIs and SOPs to determine whether country-first programs are in place for the designated area of operations.
Contractual instruments for contingency. Most contingency requirements can be met by using SAP, such as manual or electronic versions of SF 44, “Purchase Order-Invoice-Voucher” or the 3in1 Tool; DD Form 1155, “Order for Supplies and Services”; SF 1449, “Solicitation/Contract/Order for Commercial Items”; blanket purchase agreements (BPAs); and the GCPC (DFARS 253.213).
SF 44. SF 44, described in FAR 13.306 and DFARS 253.213, is a pocket-sized purchase order form designed primarily for on-the-spot, over-the-counter purchases of supplies and nonpersonal services. SF 44 can be used as a purchase order, receiving report, invoice, and public voucher. Because SF 44 contains no written terms and conditions, its use is authorized only when no other simplified acquisition method is more economical or efficient and all of the following conditions are met:
- The supplies or services are immediately available.
- One delivery and one payment are to be made.
- The amount of the purchase is at or below the micro-purchase threshold(7).
Also, if an item is below the micro-purchase threshold for a contingency operation, a competitive procurement is not needed.
The 3in1 Tool. The handheld 3in1 Tool automates the SF 44 execution and clearing process. 3in1 records and electronically transmits purchase, receipt, and payment information to a central database for automated clearing of orders and gives the CCO visibility into remote purchases for oversight and analysis. 3in1 delivers an easy-to-use technology to execute immediate, off-the-shelf field purchases of supplies and services where use of the GCPC is appropriate, but not feasible. The 3in1 Tool reduces risk to the field team, improves procurement and cash management in the field, and renders the payments and purchases immediately visible. (See the Joint Contracting and Contingency Services website and the CBE Guidebook at for additional information on the 3in1 Tool and quick-start steps to get 3in1 up and running in theater.)Usage of the 3in1 Tool is mandatory when automating the SF44 process(8). Pursuant to DFARS 218.272 “Use of electronic business tools,” no other electronic tool will be used to fulfill the same capabilities as 3in1 when supporting contingency and/or humanitarian or peacekeeping operations as defined in FAR 2.101.
DD Form 1155. As described in FAR 13.302, purchase orders are self-contained, one-time contracts that typically result in one delivery and one payment. When used as a purchase order, DD Form 1155 is authorized for purchases that do not exceed the SAT. Vendors are solicited orally or in writing. When the item requested is received or the requested service is performed, the bottom of the front page may be used as a receiving report for the government.
Contract termination. Contract termination may be for the convenience of the government (or for default) under the contract clause authorizing the termination. A contract termination includes the effective date of termination, extent of termination, and any special instructions. It also discusses steps that the contractor should take to minimize the impact on personnel if the termination, together with all other outstanding terminations, will result in a significant reduction in the contractor workforce (FAR 49.601-2(g)) and, if the termination notice is by telegram, includes these steps in the confirming letter or modification.
SF 1449. As described in FAR subparts 53.212 and 53.213, the use of SF 1449 is required in solicitations and contracts for commercial items. SF 1449 is required for the purchase of commercial items that exceed the SAT if a paper solicitation or contract is being used and the streamlined procedures of FAR 12.693 are not being used. SF 1449 is encouraged, but is not required, for purchases of commercial items that fall below the SAT (FAR 12.204) Agencies can require additional detailed instructions for use of the form to acquire commercial items. SF 1449 can also be used to acquire items that fall below the SAT, establish BPAs, and issue orders under basic ordering agreements.
DD Form 1155 or SF 1449 as a task order or delivery order. As with the SF 1449, DD Form 1155 can also be used to acquire items that fall below the SAT, establish BPAs, and issue orders under basic ordering agreements. These forms can be used as a task or delivery order against requirements-type contracts. Delivery orders are orders for supplies, and task orders are orders for services, both placed against an established requirements contract. As exact requirements become known, a DD Form 1155 or SF 1449 is sent to the supplier, initiating the delivery of supplies or services as specified in the delivery order, subject to the terms and conditions of the existing requirements contract.
DD Form 1155
|Thresholds in effect under FAR parts 2,12, and 13 and DFARS parts 202, 212, and 213||
DD Form 250, “Material Inspection and Receiving Report”
|Thresholds in effect under FAR parts 2,12, and 13 and DFARS parts 202, 212, and 213||
SF 1442, “Solicitation, Offer, and Award (Construction, Alteration, or Repair)”
SF 26, “Award/Contract”
SF 33, Solicitation, Offer, and Award
SF 30, “Amendment of Solicitation/Modification of Contract”
(a) White = seller invoice/accounting and finance; blue = Seller’s copy; pink = receiving copy; green = keep in book.
Table 5-1. Basic Contract FormsBack to Top
BPAs. As described in FAR 13.303, a BPA is a simplified method of filling anticipated repetitive needs for supplies or services by establishing charge accounts with qualified sources of supply.
BPAs have the following characteristics:
- Prepared without a purchase requisition.
- Prepared and issued on DD Form 1155 or SF 1449.
- Do not cite accounting and appropriation data.
- Made with firms from which numerous individual purchases likely will be made during a given period. For example, if experience shows that certain firms are dependable and consistently lower in price than other firms dealing in the same commodities—and if numerous simplified acquisitions are usually made from such suppliers—establishing BPAs with those firms is advantageous.
- Placed concurrently with more than one supplier for items of the same type (if practicable). In that instance, all capable contractors in the portfolio of BPAs for that service or supply must be given a fair opportunity to respond to the government’s requirement.
- Need oversight by the chiefs of contracting office (COCOs) to ensure compliance with FAR 13.303. This oversight is especially important for decentralized BPAs because they carry greater risks, such as splitting of requirements, exceeding of spending limits, and unauthorized purchases.
- Need CCO review of the strategy for their use or that of a contract. In addition, the CCO should document the strategy, ensure all BPA vendors receive a fair share of award opportunities, and verify that the prices are fair and reasonable.
Figure 5-4. Source Selection Process
Source selection procedures and techniques (competitive). As described in FAR 15.302 and DFARS 215.3, the objective of a source selection is to choose the proposal that represents the best value to the government. For competitive contract actions not using SAP, source selection procedures must be followed (FAR subpart 15.3), as well as applicable Service guidance and procedures. CCOs need to know the various review thresholds at their deployed location (such as acquisition plan, acquisition strategy, source selection plan, source selection authority, solicitation/contract review, other than full and open competition, ratification, undefinitized contract actions, and non-DoD contracts and delivery orders). Source selection has the following characteristics.
Best value continuum—lowest price technically acceptable (LPTA) and tradeoff processes. Best value can be obtained by using any one source selection approach (or a combination of them). The relative importance of cost or price varies depending on the acquisition. Therefore, the evaluation factors and their relative importance (when not using SAP) must be clearly stated in the solicitation and otherwise must comply with the requirements of FAR 15.101-1. The perceived benefits of a higher-priced proposal must be demonstrated to merit the additional cost: (1) the LPTA source selection process is appropriate when the expectation is that best value will result from selection of the technically acceptable proposal with the lowest evaluated price, and (2) the performance price tradeoff (PPT) source selection process allows performance as the only tradeoff for price. This process permits tradeoffs among cost or price and non-cost factors and allows the government to accept other than the lowest-priced proposal. The perceived benefits of the higher-priced proposal must merit the additional cost, and the rationale for tradeoffs must be documented in the file in accordance with FAR 15.406.
Evaluation factors for award. FAR subpart 15.304 specifies the principles associated with crafting sound evaluation factors. Although it permits latitude in methods, it clearly states that evaluation factors must be qualitative in nature (such as adjectival, colors, or other indicators, but not numbers) and must represent the key areas of importance for consideration in the source selection process, including past performance where applicable. Conversely, when not using SAP contracting, authorities may require the use of these elements.
- Proposal evaluation and discussions. Pursuant to FAR 15.305, proposals must be evaluated solely on the evaluation factors specified in the solicitation.
- Source selection decision and documentation. A source selection decision (SSD) that adheres to FAR subpart 15.3 must be prepared for all source selections when not using SAP. The SSD is composed of the background of the acquisition, evaluation criteria, summary of the technical and past performance evaluations, and summary of the proposed cost or price.
SAP evaluation and award. Pursuant to FAR 13.003, agencies use SAP to the maximum extent practicable for all purchases of supplies or services not exceeding the SAT (including purchases at or below the micro-purchase threshold). Important points CCOs must consider for evaluation and award under SAP are as follows:
- Use the procedures outlined in FAR subpart 13.1 and DFARS subpart 213.1.
- Use your discretion in the evaluation of offers and use the procedures in FAR part 14 or 15 as determined practical and feasible for the respective acquisition.
- Consider all offers or quotations received and evaluate them impartially and on the basis established in the solicitation manner.
- Include transportation charges from the shipping point of the supplier to the delivery destination.
- Before award, determine that the proposed price is fair and reasonable. See FAR 13.106-3(a)(2) for ways the CCO may determine price reasonableness when using SAP.
Streamlined procedures for acquisition of commercial items. FAR subpart 12.6 allows for optional procedures for (1) streamlined evaluation of offers for commercial items and (2) streamlined solicitation of offers for commercial items for use where appropriate. The FAR states “these procedures are intended to simplify the process of preparing and issuing solicitations, and evaluating offers for commercial items consistent with customary commercial practices.” This can greatly assist in providing expeditious contract support in contingency environments. For example, CCOs can use a combined synopsis-solicitation, which can reduce the time required to solicit and award contracts for the acquisition of commercial items. The procedures in FAR 12.602 give the contracting officer flexibility in the evaluation of offerors. Contracting officers should make sure to document the acquisition decisions and maintain a detailed contract file.
Sealed bidding procedures. As noted in FAR 14.101, sealed bidding is a method of contracting that employs competitive bids, public opening of bids, and awards. Sealed bidding procedures are rarely used in contingency environments. (See FAR part 14 for specific procedures.)
Advance and partial payments. The full spectrum of government financing should be considered to facilitate business partnerships in any contingency, including progress payments, payments for partial deliveries, performance-based payments, and commercial interim payments. Advance payments present the highest risk and are the most regulated financing option. These should be used as a last resort—see options instead of advance pay in the sections that follow. However, their use should not be completely dismissed. An advance-payment business strategy (commercial and noncommercial) will consider (1) conditions that warrant the request (such as lack of an established or robust banking system, unstable commercial environment, or hostilities), (2) other financing options (such as progress payments or partial payments), (3) tangible risks and mitigation plan, and (4) adequate security to protect the government’s interests. Such payments can be used for the following purposes:
- Experimental projects and research and development with nonprofit institutions
- Operation of government-owned plants
- Acquisition at cost of facilities for government ownership
- Classified items and national security
- Financially weak contractors
- Vendors when a private loan is not practicable
- Other exceptional circumstances.
A contracting officer paid a foreign contractor advance pay in the amount of $400,000 before the start of a minor construction contract. There was a critical need for the project to begin, so the CCO agreed to advance payment after the contractor gave his word that the contractor would mobilize and begin work immediately. The contractor later left the local area with the money and never started the contracted work.
The Bottom Line:
As a professional CCO, you must recognize that advance payments are very risky, especially in contingency environments, and many alternatives are available, like partial payments and progress payments. Also, proper vendor vetting can help in determining responsible vendors. Be mindful of this risk and your options during contract negotiations.
DoD FMR 7000.14-R, Volume 5, Chapter 2, “Disbursing Offices, Officers, and Agents,” describes the duties of paying agents. The commander appoints (in writing) paying agents to make payments for purchases by using cash or other negotiable instruments. A contracting officer should not be designated as a paying agent in accordance with Volume 5, Chapter 33, of DoD FMR 7000.14-R because it would violate the concept of checks and balances and create a potential conflict of interest. However, there are exceptions to this policy, usually at the Service component level, and in extreme circumstances, and as a last resort, a CCO can be dual-hatted, serving as both the CCO and the paying agent. CCOs cannot make cash payments unless they are designated as paying agents. If appointed as a paying agent, the individual CCO should be thoroughly briefed on duties and responsibilities by the financial services officer or local deputy disbursing officer.
Cash advances. The quantity of cash that the disbursing office gives to the paying agent is governed by the following considerations:
- Facilities available for replenishment of funds
- Anticipated mission requirements
- Capability to safeguard funds.
The maximum sum to be advanced to the paying agent is specified in the appointing order. The CCO might need to advance cash to others for payment of orders. When advancing cash, the CCO should obtain a receipt on DD Form 1081, “Statement of Agent Officers Account,” or SF 1165, “Receipt for Cash Subvoucher.” The disbursing officer should be informed about any losses or shortages as soon as possible.
Noncommercial advance and partial payments. As noted in FAR subpart 32.4, these payments can be used under the following conditions:
- The contractor gives adequate security.
- The payment does not exceed the unpaid contract price.
- The agency head or designee determines that such a payment is in the public interest or facilitates national defense.
- The payment does not exceed interim cash needs.
- The CCO submits the request to a higher-level headquarters official and must ensure that findings, determinations, and authorizations are provided.
Commercial advance and interim payments. As noted in FAR subpart 32.2, these payments can be used under the following conditions::
- The HCA determines the terms and conditions are appropriate.
- The commercial practice in the local market is to use buyer financing.
- The purchase is for a commercial supply or service.
- The price exceeds the SAT.
- The CCO concludes that advance payments are appropriate for the market.
- Advance payments are in the best interests of government.
- Adequate security is obtained.
- The advance payment does not exceed 15 percent of price, before performance.
- Competitive or normal financing is not available.
- The CCO obtains concurrence from the finance office and ensures that a D&F is completed for advance payments.
- Made to prime contractors for the purpose of making advances to subcontractors.
Options instead of advance payments. Other payment options include the following:
- Partial payments
- Commercial interim payments
- Progress payments
- Purchasing needed materials as a supply commodity with the SF 44 or 3in1 Tool, then providing the materials to the contractor as needed for service or minor construction
- Requesting that the disbursing officer pay cash to the vendor
The CCO can also recommend the use of SF 44 or DD Form 1155. The CCO may have to explain to the vendor that using these forms normally results in prompt payment, and explain to the customer that the CCO may decide to not do business with the vendor if the vendor will only accept advance payments. Proper market research and an understanding of the local vendor base will assist in making that determination. Advance payments are acceptable for subscriptions (FAR 32.404(a) and FAR clause 52.213-2).
Partial payment. The CCO places a statement on the invoice so the finance officer knows the invoice is a partial—rather than final—payment. The partial payment statement complies with the following regulations:
- Finance guidance for partial payment in DoD FMR 7000.14-R, Volume 10, Chapter 10, Section 1003
- Exceptional circumstances only (FAR 32.403(h)).
Settlement of paying agent account. After deployment operations or when the disbursing office resumes operations, the paying agent terminates this account with the disbursing office. The paying agent obtains and completes DD Form 1081, “Statement of Agent Officer’s Account,” showing the account reduced to zero.Back to Top
Ordering Officers and FOOs. These individuals have been authorized, in accordance with FAR 1.603-3(b) and 13.201(a), and DFARS 201.603-3(b), by the contracting officer in writing to execute micro-purchases using SF 44 and the 3in1 Tool. SF 44 or the 3in1 Tool may be used by personnel other than the CCO provided that the individual does the following:
- Receives written authorization from the contingency contracting officer. The CCO should give a copy of the written authorization to the finance and accounting officer, in effect delegating authority to sign a contract instrument.
- Receives training by the contingency contracting officer on the SF 44 and 3in1 Tool.
- Is teamed with an appointed and trained paying agent.In addition, the paying agent must also be designated in writing.
Designation. The CCO may designate individuals as FOOs, either from within or outside the contracting organization, with the authority to execute micro-purchases by using SF 44 or 3in1 Tool. The CCO needs to exercise strict operational control and oversight of FOOs to prevent violations of laws and regulations. The CCO is responsible for helping the commander determine the adequate number of FOOs required to ensure mission accomplishment. Commanders should have a point of contact for each FOO team.
Nomination, appointment, and termination. Commanders must formally nominate FOO candidates, by name, to the CCO for appointment; this responsibility cannot be delegated. The FOO candidate must be a DoD employee; contractor employees cannot be FOOs. The CCO must determine the validity of the requirement and formally appoint personnel as FOOs via official appointment letters. The appointment letter must specify the extent and limitations of the FOO’s authority to act on behalf of the CCO. The appointment is effective until the FOO is reassigned to another unit or the CCO terminates the individual’s duties. The CCO (or higher authority) reserves the right to revoke an FOO appointment at any time. Such a revocation must be made in writing.
Qualification and training. At least annually, the FOO candidate must review the standards of conduct as specified in DoD Directive 5500.7-R, “Joint Ethics Regulation.” The CCO must develop an effective FOO training program, and the FOO candidate must complete training before official appointment as a FOO. Refresher training is conducted when the CCO deems it necessary. In larger contingencies, the COCO (rather than individual CCOs) is responsible for management and oversight of the FOO and ordering officer decentralized purchasing programs.
Authority and responsibilities. The scope of the delegated authority limits all FOOs in terms of the dollar limitation they may obligate. The FOO must review the written appointment to ensure a complete understanding of the scope and limitations of FOO authority. Before making any purchases, the FOO must receive written appointment orders from the CCO and a funded document from the comptroller, showing a fund cite with a specific dollar amount. The FOO cannot exceed the amount specified in the document. If additional funds are required, the FOO must request and receive more funds from the comptroller before proceeding with any purchases. After the FOO receives a valid PR, the FOO must answer the following questions:
- Is the purchase allowable in accordance with established purchasing procedures?
- Are funds available?
- Do I have authority to purchase the item (type and dollar threshold)?
- Are the supplies available in the supply system or from another government source?
- Is this the most efficient purchase method?
After considering this information, the FOO must record all PRs in a logbook, as approved by the CCO. The FOO must maintain the original PR document, a copy of the SF 44 used for the purchase, logbook, original receipt of the purchase, and receipt for property received (RPR). When the 3in1 Tool is used, it records all information and documents it electronically. FOO considerations include the following:
- Limitations. FOOs may not redelegate their authority. The CCO may set additional limitations to maintain an effective and efficient FOO program.
- Separation of functions. To ensure the integrity of the procurement process, the FOO must avoid, if possible, being a paying agent, certifying official, or individual receiving the products or nonpersonal services.
- Evaluation, documentation, and reconciliation. The CCO supervises the FOO. At least monthly, or as otherwise determined by the CCO, the CCO reviews and reconciles the FOO’s purchase documents. This review is documented on the FOO clearance letter, which can be done electronically when using the 3in1 Tool. After receiving this letter, the FOO reconciles the account with the paying agent. The CCO immediately forwards any potential case of waste, fraud, or abuse to the appropriate legal office for review.
- Revocation of authority. When a FOO appointment is terminated for any reason, the FOO gives the CCO (1) a copy of the appointment letter; (2) copies of all previously filed reports; (3) a complete report for any period between the last audit and termination date; (4) receipts, PRs, and RPRs; and (5) any unused SF 44s.
Once the CCO conducts a final review and documents the outcome, the CCO issues an official Revocation of Authority to the FOO, terminating the appointment. One copy each is provided to the terminated FOO, FOO’s commanding officer, and appropriate disbursing office; one copy is maintained on file with the contingency contracting office. Any additional purchases or business agreements by the FOO after revocation of this authority are considered unauthorized commitments, for which the former FOO may be held liable.
FOO violations. The CCO may revoke the FOO appointment for any violation of regulations, orders, or statutory authority. The administration of decentralized purchasing programs carries an increased risk of becoming problematic. Typical violations include the following:
- Unauthorized commitments
- Splitting of requirements to stay below authorized thresholds
- Purchases above authorized limits
- Purchases outside the purpose of the appropriated funds
- Purchasing items not authorized under local programs or BPA price lists or not authorized by the CCO
- Delinquent reconciliation with the CCO
- Training delinquencies
- Circumvention of Competition in Contracting Act (CICA) requirements.
Violations may result in revocation of the FOO appointment and of any additional FOOs within the unit, section, or battalion. In the case of an unauthorized commitment, the revocation remains effective until the unauthorized commitment is ratified by the appropriate authority and reviewed by legal officials to determine whether disciplinary action is recommended. For other violations, the CCO may reinstate the FOO appointment after correcting the deficiency.Back to Top
Procurement instrument identification numbers. DFARS 204.70 specifies policies and procedures for assigning procurement instrument identification numbers (PIINs) to all solicitations, contracts, and related instruments. The PIIN is designed to help track all actions. Table 5-2 shows an example of a PIIN from DFARS subparts 204.7003 and 204.7004.
|DoDAAC||Last 2 Digits of FY||Instrument Type||Serial no.||Supplemental no.|
Table 5-2. Sample PIIN N00062-15 -D-0001-0005
Procurement instrument identification number logs. Establishing and maintaining accurate PIIN logs in accordance with DFARS 204.70 is essential in the contingency environment.
Contract action report (CAR). As noted in FAR 4.601, a CAR is required for all contract actions that obligate or deobligate more than $3,000 in funds and must be submitted within 3 business days of executing an action. In addition, all modifications, regardless of price, must be reported. However, in a contingency, OCONUS reporting might not be possible because of the lack of Internet connectivity. Therefore, actions that require reporting must be accomplished after arrival in an area where Internet connectivity is available, which may be upon redeployment to CONUS bases or stations (DFARS PGI 204.606(1)(iii)). CARs can be created on the Federal Procurement Data System–Next Generation (FPDS-NG) website. The CAR replaced reports using DD Form 350, “Individual Contracting Action Report,” and DD Form 1057, “Monthly Summary of Contracting Actions.”
The CAR process is as follows:
- The contract is complete, through approval by the CCO.
- The CCO creates the CAR from the unreleased contract, through validation and approval. The CAR is created directly on the FPDS-NG website, with a link to the CAR in the Standard Procurement Data System.
- Both the contract and CAR are routed to the CCO for release of the contract and finalization of the CAR.
An express CAR is used to report data for more than one contract action. The following contract actions may be reported on an express CAR instead of an individual CAR:
- Indefinite delivery/indefinite quantity (IDIQ) contract vehicles, requirements contracts, BPAs, and basic ordering agreements
- Contracts from foreign vendors not registered in the System for Award Management (SAM),
The CAR is created before the release of the contract action. In FPDS-NG, much of the CAR is prepopulated with data in the contract (such as data from the North American Industry Classification System and Service Contract Act). Creation of the CAR before release of the contract enables correction of the contract so that the CAR can pass the validation process in FPDS-NG. Training for FPDS-NG is available at the FPDS-NG website.
Awards using appropriated funds must follow the congressional notification procedures in DFARS 205.303 unless an exception in FAR 5.202 applies. The reachback office can assist in preparing congressional notifications to alleviate the burden on forward-deployed units or CCOs. Training personnel early and often is a best practice because turnover occurs routinely.Back to Top
An unauthorized commitment is an agreement that is nonbinding solely because the government representative who made it lacked the authority to enter into that agreement, as explained in FAR 1.602-3. An unauthorized commitment typically occurs in a contingency environment when a well-meaning individual believes that immediate action is necessary to support the mission. Ratification occurs when an official who has the appropriate authority approves an unauthorized commitment to pay for supplies or services provided to the government as a result of an unauthorized commitment (FAR 1.602-3(a)). The need for ratification can be avoided if the CCO is involved in the operation early and becomes highly visible.
The HCA may ratify an unauthorized commitment up to a specified threshold, as designated by agency procedures. The HCA may further delegate ratification authority at specific thresholds to the Senior Contracting Official or the Regional Contracting Center (RCC) office.
At least quarterly, the RCC chief must publish to the base populace a reminder that only duly appointed contracting officers can obligate the government. Commanders reinforce this policy by publishing letters to emphasize the seriousness of obligating the government without proper authority.
The processing of a ratification involves determining whether the action should be ratified into a contract and then creating the contract document. Actions that do not meet the criteria are deemed non-ratifiable and are subject to resolution by the Government Accountability Office under its claim procedures.Back to Top
The following references were not mentioned in this chapter but offer additional information related to contract support execution:
- 10 U.S.C. 2305, Contracts: Planning, Solicitation, Evaluation, and Award Procedures
- DoDI 3020.41, Operational Contract Support (OCS)
- DoDI 1100.22, Policy and Procedures for Determining Workforce Mix
- GAO-13-283, GAO High Risk Series: An Update.
1. DoD has a business enterprise architecture (BEA) that contains documentation in six domains: strategy, business (process), application, data, infrastructure, and security. The P2P process, P2P Version 10 (P2P 10.0) lies within the business domain process and is managed by the P2P Process Advocates’ Group (P2PPAWG).
7. Warranted CCOs may use SF 44 for overseas transactions when supporting contingency or humanitarian or peacekeeping operations, as defined in FAR 2.101, not to exceed the SAT in accordance with DFARS 218.201(6).Back to Top