**BONNEVILLE PURCHASING INSTRUCTIONS**

APPENDIX 14-A

CONTRACTING OFFICER\'S TECHNICAL\
REPRESENTATIVES\' GUIDE FOR\
CONTRACT ADMINISTRATION

# TABLE OF CONTENTS

SECTION 1 INTRODUCTION TO THIS GUIDE
[4](#section-1-introduction-to-this-guide)

SECTION 2 ROLES AND RESPONSIBILITIES. [5](#__RefHeading___Toc430493249)

2.1 Contracting Officer\'s (CO) Role.
[55](#contracting-officers-co-role.)

2.2 Contracting Officer\'s Representative\'s (COR) Role.
[55](#contracting-officers-representatives-cor-role.)

2.3 Contracting Officer\'s Technical Representative\'s (COTR) Role.
[55](#contracting-officers-technical-representatives-cotr-role.)

2.4 Field Inspector\'s Role. [66](#field-inspectors-role.)

2.5 Establishing the Contract Administration Team.
[88](#establishing-the-contract-administration-team.)

2.6 Channels of Communication. [88](#channels-of-communication.)

SECTION 3 INITIAL CONTRACT ADMINISTRATION ACTIVITIES
[9](#section-3-initial-contract-administration-activities)

3.1 Read the Contract. [99](#read-the-contract.)

3.2 Establish a Contract Administration File.
[99](#establish-a-contract-administration-file.)

3.3 Find Out What the Contractor Is Planning to Do.
[99](#find-out-what-the-contractor-is-planning-to-do.)

3.3.1 Post-Award Meeting with the Contractor.
[99](#post-award-meeting-with-the-contractor.)

3.3.2 Performance Schedule. [1010](#performance-schedule.)

SECTION 4 MONITORING ACTIVITIES. [11](#section-4-monitoring-activities.)

4.1 General. [1111](#general.)

4.2 Track What the Contractor Is Doing.
[1111](#track-what-the-contractor-is-doing.)

4.3 BPA-Furnished Property. [1212](#bpa-furnished-property.)

4.4 COTR Performance Status Reporting.
[1313](#cotr-performance-status-reporting.)

4.5 Financial Monitoring. [1414](#financial-monitoring.)

SECTION 5 CONTRACT MODIFICATION. [15](#section-5-contract-modification.)

5.1 Contract Modification. [1515](#contract-modification.)

5.2 No-Cost Time Extensions. [1515](#no-cost-time-extensions.)

5.3 BPA Caused Delays. [1515](#bpa-caused-delays.)

5.4 Constructive Changes. [1616](#constructive-changes.)

SECTION 6 ACCEPTANCE AND PAYMENT.
[17](#section-6-acceptance-and-payment.)

6.1 Requirements for Acceptance. [1717](#requirements-for-acceptance.)

6.1.1 Acceptance Defined. [1717](#acceptance-defined.)

6.1.2 Responsibility for Acceptance.
[1717](#responsibility-for-acceptance.)

6.1.2.1 Accepting Services. [1818](#accepting-services.)

6.1.2.2 Accepting Supplies. [1919](#accepting-supplies.)

6.1.2.3 Accepting Construction. [1919](#accepting-construction.)

6.1.3 Acceptance Certification. [2020](#acceptance-certification.)

6.2 Processing Invoices. [2121](#processing-invoices.)

6.2.1 Receiving Invoices. [2121](#receiving-invoices.)

6.2.2 Reviewing Invoices. [2121](#reviewing-invoices.)

6.2.2.1 Reviewing Fixed-Price Contract Invoices.
[2222](#reviewing-fixed-price-contract-invoices.)

6.2.2.2 Reviewing Cost-Reimbursement Contract Invoices.
[2222](#reviewing-cost-reimbursement-contract-invoices.)

6.2.2.3 Reviewing Time-and-Material Contract Invoices.
[2323](#reviewing-time-and-material-contract-invoices.)

6.2.3 Forwarding Invoices. [2323](#forwarding-invoices.)

6.2.4 Recording Invoices. [2323](#recording-invoices.)

SECTION 7 PLACING DELIVERY OR TASK ORDERS.
[24](#section-7-placing-delivery-or-task-orders.)

7.1 Understanding Delivery or Task Order Contracts.
[2424](#understanding-delivery-or-task-order-contracts.)

7.2 Administering Delivery or Task Order Contracts.
[2424](#administering-delivery-or-task-order-contracts.)

7.3 Preparing Requests for Delivery or Task Orders.
[2424](#preparing-requests-for-delivery-or-task-orders.)

7.3.1 Preparing Delivery Orders. [2424](#preparing-delivery-orders.)

7.3.2 Preparing Task Orders. [2424](#preparing-task-orders.)

7.4 Issuing Delivery or Task Orders.
[2525](#issuing-delivery-or-task-orders.)

7.4.1 CO Issues the Order. [2525](#co-issues-the-order.)

7.4.2 COTR Issues the Order. [2525](#cotr-issues-the-order.)

SECTION 8 REMEDIAL ACTIONS. [26](#section-8-remedial-actions.)

8.1 Initial Action When Contract Requirements Are Not Being Met.
[2626](#initial-action-when-contract-requirements-are-not-being-met.)

8.1.1 Contractor Agrees with COTR. [2626](#contractor-agrees-with-cotr.)

8.1.2 Contractor Disagrees with COTR.
[2626](#contractor-disagrees-with-cotr.)

8.2 Dealing with Failure to Comply.
[2727](#dealing-with-failure-to-comply.)

8.3 Conduct in Case of an Overrun.
[2727](#conduct-in-case-of-an-overrun.)

8.4 Disputes. [2727](#disputes.)

8.5 Suspension of Work. [2828](#suspension-of-work.)

8.6 Claims. [2828](#claims.)

8.7 CO Final Decisions. [2929](#co-final-decisions.)

8.8 Termination. [2929](#termination.)

SECTION 9 ADMINISTERING INTERGOVERNMENTAL CONTRACTS.
[31](#section-9-administering-intergovernmental-contracts.)

9.1 Nature of Intergovernmental Contracts.
[3131](#nature-of-intergovernmental-contracts.)

9.2 COTR Responsibilities. [3131](#cotr-responsibilities.)

9.3 IGC Billing Procedures - Contracts with Other Federal Agencies.
[3131](#igc-billing-procedures---contracts-with-other-federal-agencies.)

9.4 IGC billing procedures - other than federal agencies.
[3232](#igc-billing-procedures---other-than-federal-agencies.)

SECTION 10 COMPLETION AND CLOSE-OUT.
[33](#section-10-completion-and-close-out.)

SECTION 11 STANDARDS OF CONDUCT. [34](#section-11-standards-of-conduct.)

11.1 Business Ethics. [3434](#business-ethics.)

11.2 Conflicts of Interest. [3535](#conflicts-of-interest.)

11.3 Purchasing Standards of Conduct.
[3535](#purchasing-standards-of-conduct.)

11.4 BPA Harassment Policy. [3636](#bpa-harassment-policy.)

SECTION 12 DOS AND DON\'TS FOR COTRs.
[37](#section-12-dos-and-donts-for-cotrs.)

12.1 DOS. [3737](#dos.)

12.2 DON\'TS. [3838](#donts.)

Exhibit 1 Sample COTR Delegation Memorandum
[40](#exhibit-1-sample-cotr-delegation-memorandum)

Exhibit 2 Sample Field Inspector Delegation Memorandum
[42](#exhibit-2-sample-field-inspector-delegation-memorandum)

Exhibit 3 Contracting Authority and Communication Channels
[43](#exhibit-3-contracting-authority-and-communication-channels)

Exhibit 4 Typical Contents of COTR\'s Contract Administration File
[44](#exhibit-4-typical-contents-of-cotrs-contract-administration-file)

Exhibit 5 COTR\'s Status Report [46](#exhibit-5-cotrs-status-report)

Exhibit 6 Correction Memorandum [47](#exhibit-6-correction-memorandum)

Exhibit 7 Sample Notice for Improper Invoice
[48](#exhibit-7-sample-notice-for-improper-invoice)

Exhibit 8 Checklist for the Review of Cost-Reimbursement Contract
Invoices
[49](#exhibit-8-checklist-for-the-review-of-cost-reimbursement-contract-invoices)

Exhibit 9 Invoice Control Sheet [50](#exhibit-9-invoice-control-sheet)

Exhibit 10 Definitions [51](#exhibit-10-definitions)

###   {#section .unnumbered}

### SECTION 1 INTRODUCTION TO THIS GUIDE

This guide outlines the duties of those BPA personnel designated as
Contracting Officer\'s Technical Representatives (COTRs), who perform
supply, service, and construction contract (including intergovernmental
contract) administration functions as an adjunct to their normal duties.
Contracting Officers (COs) designate COTRs to perform technical contract
administration functions. The COTR is an indispensable, key member of
the contracting team. The COTR is still accountable, however, to his/her
line supervisor for performance of regularly-assigned duties. For
contract administration duties, however, the COTR reports directly to,
and is accountable only to, the CO. The COTR\'s supervisor must allow
sufficient time to ensure that the COTR can adequately monitor the
contract for technical compliance.

This Guide is not directly applicable to the following:

Contracts for lease or purchase of real property;

Contracts involving power (such as purchase, wheeling, or sale of
power), acquisition of conservation, energy efficiency products or
services, or loans and loan guarantees for the acquisition of power or
conservation; or

Grants and Cooperative Agreements (See Bonneville Financial Assistance
Instructions)

Comments on the contents of this Guide and suggestions for its
improvement should be directed to the Head of the Contracting Activity
(HCA), routing GP.

Effective August 2000, with implementation of the Enterprise Resource
Planning (ERP) System, BPA has adopted the use of PassPort and
PeopleSoft system capability to transmit and store certain electronic
award documents and records as part of its official files. It is
anticipated that some contract administration documents will be
maintained as paper and electronic records. The benefit of storing
contract administration data and records in the ERP system is the ease
of information retrieval and access by those who administer contracts
directly, as well as those who need current status information for
project and work planning purposes.

The content of some Exhibits in this guide may be stored electronically
within the ERP system. In particular, the ERP system contains various
panels and data fields which can store the information found on Exhibit
4, COTR's Contract Administration File, Exhibit 5, COTR's Status
Report;, and Exhibit 9, Invoice Control Sheet. Some information can be
entered into the system, such as narrative discussions of contract
performance and status. Other data will be automatically generated by
the system, such as the complete history of invoices received and
certified to date. COTR's must receive training on the ERP system prior
to receiving authorization to certify invoices within the system, and
this training will also educate the COTR on where various contract
administration information is located.

[]{#__RefHeading___Toc430493249 .anchor}

### SECTION 2 ROLES AND RESPONSIBILITIES.

#### 2.1 Contracting Officer\'s (CO) Role.

The CO\'s major post-award responsibilities include ensuring performance
of all actions required for effective contracting, ensuring compliance
with the terms of the contract, and safeguarding the interests of BPA in
its contractual relationships. More specifically, in the course of
administering the awarded contracts or intergovernmental contracts, the
CO has ultimate legal and commercial accountability and is responsible
for the activities of the COR and the COTR.

#### 2.2 Contracting Officer\'s Representative\'s (COR) Role.

The COR supports the CO in administrative matters during any portion of
the contract process. If no COR is designated, the CO will perform those
duties.

#### 2.3 Contracting Officer\'s Technical Representative\'s (COTR) Role.

The Contracting Officer\'s Technical Representative (COTR) is designated
and authorized by the CO to perform technical contract administration
activities for specific contract(s) on behalf of the CO. (See Exhibit 1
for Sample COTR Delegation Memorandum.) The COTR designation by the CO
is most often based upon a responsible program or project manager's
recommendation of a technically qualified candidate. It is essential
that the COTR have the necessary qualifications and resources available,
including time, to monitor the technical requirements of the contract.
In order to be delegated authority to act as a COTR, the person must
have completed training in contract administration activities, and have
annually reviewed the Purchasing Standards of Conduct found in BPI Part
3 and BPI Appendix 3-A.

The job of COTR incorporates a number of responsibilities and duties.
Typically the COTR:

\(a\) Has a thorough technical understanding of all facets of the
contract, including the planning of related contract administration
activities;

\(b\) Designates technically qualified field inspector(s), if needed to
assist in contract administration activities (see Exhibit 2);

\(c\) Conducts as necessary, in cooperation with the CO and field
inspector(s), a pre-work conference, review of contractor's proposed
progress schedule, work hours, safety and safety plan requirements,
permits and approvals, subcontracts, and other contract-specific
requirements;

\(d\) Reviews contractor's schedule of need for BPA furnished material
(if required) and coordinates those needs with BPA materials management
staff, and resolves problems with processing of contractor material
submittals;

\(e\) Assures that ADP security, safety, labor standards and other
screening of contractor and subcontractor personnel required by the
contract are performed;

\(f\) Maintains a record of all communications with the contractor and
significant events relating to the contract; makes routine
correspondence pertaining to administration of the contract available to
the CO as needed;

\(g\) Serves as liaison between the contractor and CO on matters
pertaining to the technical contract requirements, builds rapport with
the contractor, assists the contractor in interpreting technical
requirements of the contract, ensures internal BPA coordination of
technical requirements with design or other organizations, as necessary
or otherwise required by policy;

\(h\) Makes no commitments to the contractor regarding changes in price,
delivery, statement of work, or other contractual terms; instead,
performs technical analyses of contractor cost proposals for contract
modifications or extensions, recommends such changes, with appropriate
technical and cost justification and input from the contractor (if
required) to the CO in writing; assures that changes are issued by the
CO before the contractor is directed to proceed with such changes.
(Note, however, that the CO may delegate to the COTR and/or field
inspector(s) limited authority to make field modifications, typically
for construction);

\(i\) Monitors the contractor\'s performance; witnesses or conducts
tests; releases shipments (typically for supply); records observations
(including a photographic record of work-site or other contract
performance conditions, when necessary) and notes areas for improvement
based on contract requirements; performs monitoring activities and
status reporting (see Exhibit 5), including timely reporting of
potential and actual slippage in contract performance periods; furnishes
copy of evaluation report to CO;

\(j\) Establishes a progress payment schedule, reviews each voucher or
invoice submitted by the contractor and recommends payment based on
performance and reasonableness of cost; advises the CO of anticipated
overruns or underruns of the estimated cost under cost-reimbursement
contracts;

\(k\) Recommends corrective actions to the CO to restore contract
performance or delivery schedule;

\(l\) Advises the CO of the need for interaction and administrative
actions with the contractor; keeps the CO informed of situations that
could jeopardize performance or become a basis for future claims;
provides copies of relevant correspondence with the contractor to the
CO;

\(m\) Monitors any required quality activities, reviews contractor's
quality program, checks contractor performance against standards of
acceptance stated in the contract, and provides acceptance of final
deliverables on behalf of BPA;

\(n\) Receives and processes (if required) contractor operating and
maintenance (O&M) manuals and special warranties, sending them to using
organizations, and assists CO in resolving warranty repair problems;

\(o\) Assists CO in coordination and arrangement for disposition of
property after completion or termination of the contract;

\(p\) Initiates, signs and forwards to the CO (typically for
construction) a contract completion report and a recommendation of final
acceptance of contractor's work, and prepares and sends to contractor a
release of claims which contractor then completes and returns to the CO
(assists the CO in resolving any exceptions noted); and

\(q\) Completes overall evaluation of the contractor\'s performance and
provides it to the CO for the contract close-out and for use in future
contracting.

#### 2.4 Field Inspector\'s Role.

Field inspector(s) are authorized representatives of the COTR, appointed
by a memorandum written by the COTR with a copy to the CO. (See the
sample memorandum in Exhibit 2.) The field inspector is typically
responsible for functions such as inspection and review of the work
performed under the contract, witnessing of tests, interpretation of
technical specifications, reviewing invoices, and recommending approval
of specific reports, materials, or services. Field inspector
designations automatically terminate at the conclusion of the contract
activities. COs or COTRs may also terminate the designation in writing
during the performance of the contract if the need for a field inspector
no longer exists, or if the individual\'s performance is inadequate.

The list of duties for a field inspector will vary with the specific
demands of the contract type (service, supply or construction), and the
specific kinds of duties designated by the COTR. Typically, the field
inspector:

\(a\) Participates, as necessary, with the CO and COTR, in a pre-work
conference for requirements relating to area of assigned responsibility;

\(b\) Serves as a representative of the COTR to monitor, inspect and
review work performed under the contract for compliance with the
technical specifications or purchase description, drawings, work
schedules and labor standards of the contract (performs worker
interviews and consultation, if needed, for construction); witnesses
tests; recommends approval of specific reports, materials, or services;

\(c\) Advises the contractor promptly in writing of noncompliance with
contract provisions, but makes no commitment to contractor regarding
changes in price, delivery, statement of work, or other contractual
terms (Note, however, that the CO may delegate field inspector(s)
limited authority to make field modifications, typically for
construction); reports promptly to the COTR any refusal or failure by
the contractor to comply with contract requirements;

\(d\) Monitors and promptly reports unsafe workplace practices or
conditions to contractor and COTR, receives and processes contractor
accident reports per established safety policy;

\(e\) Maintains and provides COTR with timely progress reports noting
contract performance status, potential and actual slippage in contract
performance; recommends corrective actions to the CO, through the COTR,
to restore contract performance or delivery schedule; provides COTR with
copies of his/her official daily diaries about all actions, events, and
other developments, including a photographic record of worksite
conditions (as necessary) that may be a useful record in the event of a
dispute or investigation; collects and reviews daily records of
performance from the contractor and its subcontractor(s), as required;
makes routine correspondence pertaining to administration of the
contract available to the CO through the COTR;

\(f\) Reviews payment vouchers or invoices submitted by the contractor
and recommends payment based on performance and reasonableness of cost;
advises the CO, through the COTR, of anticipated overruns or underruns
of the estimated cost under cost-reimbursement contracts;

\(g\) Investigates and resolves property owner complaints and
non-monetary correction of damages resulting from contractor actions or
inaction (typically for construction or on-site services);

\(h\) Assists CO and COTR in coordination and arrangement for
disposition of property after completion or termination of the contract;

\(i\) Ensures the contractor maintains current as-built drawings
(typically for construction);

\(j\) Determines and advises COTR when the work is substantially
complete (typically for construction);

\(k\) Assists the COTR with final inspection, ensures correction of
punchlist items (typically for construction) and recommends final
acceptance of contractor's work and all deliverables; and

\(l\) Provides input to COTR for evaluation of the contractor\'s
performance for contract close-out and for use in future contracting.

#### 2.5 Establishing the Contract Administration Team.

The CO establishes the contract team and sets forth their duties in
writing. The COTR is formally designated at the time of contract award.

#### 2.6 Channels of Communication.

The relationships between COs, CORs, COTRs, field inspectors and BPA
program or project and contractor personnel are shown in Exhibit 3.

Much of the COTR\'s work is accomplished through communication with the
contractor. Performance and understanding can be enhanced by clearly
establishing the channels through which the communication should flow.
At the outset, the COTR ascertains from the contractor who will be
acting as the contractor\'s representative on the contractor\'s staff
for technical liaison and contract administration functions for the
contract.

Even though the CO and COTR are the primary representatives authorized
to contractually represent BPA, they cannot do so without help.
Effective communication with and the support of BPA program managers and
support staff may be critical. The CO and COTR must keep the responsible
manager(s) informed of the current contract completion status, and
coordinate corrective measures, as necessary.

### SECTION 3 INITIAL CONTRACT ADMINISTRATION ACTIVITIES

#### 3.1 Read the Contract.

The COTR will receive a copy of the contract from the CO. The COTR and
field inspector(s) (if designated) should read it thoroughly and become
familiar with all aspects of the contract, including the administrative
clauses (\"boilerplate\"), in order to administer the contract
effectively.

#### 3.2 Establish a Contract Administration File.

The need to maintain adequate records, logs, and reports cannot be
overemphasized. The amount of documentation, however, is less important
than what is recorded and the completeness of the record. Generally,
significant events and business decisions made during contract
administration must be documented.

All documents related to the administration of the contract, including
internal correspondence, should be kept in a file. It is recommended
that the COTR's contract file be identical to that used by the CO or
COR. Items to be found in a typical contract administration file are
listed in Exhibit 4. This sample file may be adapted as needed to
administer each type of contract.

#### 3.3 Find Out What the Contractor Is Planning to Do.

Having established what the contract requires the contractor to do, the
COTR and field inspector(s), if designated, must learn what the
contractor is planning to do. The COTR should initiate contact with the
contractor to establish a communication channel with the COTR\'s
counterpart.

Techniques for gathering information about the contractor\'s plans for
performance include conducting a post-award meeting with the contractor
and reviewing the contractor's proposed performance schedule.

##### 3.3.1 Post-Award Meeting with the Contractor.

The CO should hold a post-award orientation meeting with the contractor.
The meeting includes the CO (or designated representative) and technical
representatives on behalf of BPA. The counterpart representatives of the
contractor should also be invited to attend. This meeting provides a
means for reviewing the contractor\'s plans for performing the contract,
for uncovering misunderstandings about contract requirements, and for
resolving and clarifying matters on what the contract requires of the
contractor. Sample agenda items, if not resolved before award, might
include:

\(a\) Performance schedule;

\(b\) Statement of work or specifications, drawings and other
performance requirements;

\(c\) Quality management activities;

\(d\) Special contract provisions;

\(e\) Reporting requirements;

\(f\) Procedures for monitoring and measuring progress;

\(g\) General overview of clauses, changes, payments, labor laws, etc.;

\(h\) Billing and payment procedures;

\(i\) Property issuance, management policy and procedures, if
applicable;

\(j\) Discussion of travel policy and regulations, if applicable;

\(k\) Distribution of appropriate posters, wage decisions, BPA policies
for on-site contractors, and associated record keeping and submittals,
as required;

\(l\) Identity of key officials and their authorities;

\(m\) Discussion of project hazards and contractor's safety plan and
site-specific safety plan, as applicable; and

\(n\) Environmental requirements.

If a formal post-award orientation conference is not practical,
telephone discussions can serve the same purpose.

##### 3.3.2 Performance Schedule.

Obtain the contractor\'s plan for conducting the contract work, and
review it for consistency with contract requirements. When the contract
contains a provision that requires the contractor to submit work plans,
the COTR should obtain and review them. Even if the contract does not
require a formal submission, the COTR should confer with the contractor
to gain a thorough understanding of planned activities, and quickly
address any matters that would appear to prejudice successful contract
performance.

### SECTION 4 MONITORING ACTIVITIES.

#### 4.1 General.

The contractor and the COTR both are responsible for monitoring contract
work, but for different reasons. The contractor is responsible to ensure
that it's performance or supplies delivered complies with the terms of
the contract. It is not the COTR's responsibility to do this for the
contractor. As a practical matter, however, the COTR typically does, to
the extent and manner described in the contract, inspect and monitor the
contractor's work and quality assurance activities. The reason the COTR
monitors the contractor's activities and work products is to ensure that
adequate, timely progress is maintained to complete the work as per the
terms of the contract. An important right of BPA (actually any buyer,
for that matter) is the right to inspect supplies or services before
acceptance. (See section 6.1.1 regarding acceptance). The purpose of
this rule is to give the CO and COTR an opportunity to determine whether
or not the supplies or services comply with the contract description and
other contract terms.

The specific contract oversight activities of the COTR are described in
the contract. The extent of oversight activities needed will likely vary
from contract to contract. The primary basis for contract oversight is
the contract inspection and acceptance clause. Essentially, this clause
gives BPA the right to inspect and test work of the contractor, and
subcontractors, as called for by the contract, at any time, and any
place. BPA will, however, perform its inspections in a manner that will
not unduly delay the contractor's work. Other, more specific, oversight
requirements are found in the contract statement of work or
specifications. In the case of commercial supplies and services,
however, inspection and acceptance will typically be more limited in
scope and usually conducted at the place specified for delivery or
performance.

The challenge for the COTR in monitoring contracts of all types (supply,
service or construction) is to work closely with the contractor
representative to ensure that:

\(a\) The contractor accomplishes the specific tasks called for in the
contract;

\(b\) The quality of services or work products is as required by the
contract;

\(c\) The services performed or work products developed (particularly
for cost reimbursement, time and materials or a unit priced, estimated
quantity type contracts) are accomplished in an efficient manner and
that the contractor adequately plans and executes the contract effort to
ensure that time and money are not wasted;

\(d\) Work hazards are identified and accident avoidance measures are
appropriate; and

\(e\) Time schedules in the contract are met.

#### 4.2 Track What the Contractor Is Doing.

Since effective corrective actions cannot be taken if the magnitude of
problems is unknown, the COTR must be able to identify problems and
determine their significance. The basic method of contract
administration is contract monitoring, or surveillance of progress.

Monitoring the contractor's progress involves the use of numerous
techniques and procedures to determine whether satisfactory and timely
delivery or completion will occur. Contracts are monitored to determine
how contract work is being performed (in accordance with the purchase
description, Statement of Work or specifications), whether it will be
completed on schedule, and whether its cost (cost reimbursement or
time-and-material type contracts) will fall within the contract\'s
ceiling. The COTR and other contracting personnel have a responsibility
to monitor the contractor\'s performance to ensure compliance with
contract requirements. That task depends on accurate and timely
information obtained from the contractor.

Many contracts include provisions that require the contractor
periodically to submit written progress reports. COTRs should
familiarize themselves with what these reports are required to contain
and when they are due. The COTR should:

\(a\) [Get progress reports]{.underline}.

\(b\) [Read progress reports]{.underline}.

\(c\) [Analyze billings]{.underline}. (See Section 6 for detailed
procedures.).

\(d\) [Monitor the contractor\'s performance by inspection]{.underline}.
The best way to monitor the contractor\'s work is through actual
inspection. Standard inspection clauses may be included in BPA contracts
to give BPA\'s authorized representatives the right to inspect and
witness or conduct tests to monitor performance at all stages and
wherever the work is being conducted, including the work of
subcontractors. For construction work, this also includes work performed
off the primary construction site. The COTR should be familiar with the
inspection provisions in the specific contract. It is useful to stay
ahead of actual performance. Try to determine the contractor's planned
approach. It is particularly important that certain work be inspected as
work is conducted, particularly when components of work in process are
difficult or impossible to inspect at later stages of contract
performance. In this way, the COTR's inspection effort is not likely to
hinder the contractor's progress.

\(e\) [Encourage timely performance in cost-type contracts]{.underline}.
If a contractor is late on a cost contract, there is practically no
monetary adjustment in the contract price due BPA. For that reason,
early and continuing attention by the COTR is the best way to ensure
timely delivery and cost control. Close communication with the CO is
necessary before lateness becomes a problem.

\(f\) [Document contacts with contractor]{.underline}. Use a contract
administration file log to keep a diary of the contacts (including
significant phone conversations) with the contractor. The need to
maintain adequate records or logs is vital. These records provide a
basis for defending against claims and are reviewable by the appropriate
board of contract appeals or by the courts. (See Exhibit 5).

\(g\) [Assess the competence of the contractor\'s
performance]{.underline} and the initial deliverables against
contractual standards of quality and efficiency:

Do the contractor personnel have the competence to complete the contract
in an efficient and timely manner?

Are the preliminary work products or deliverables up to the standard of
quality required by the contract?

Are the contractor\'s personnel being adequately supervised by
contractor\'s management so that they produce quality work?

#### 4.3 BPA-Furnished Property.

Some contracts provide BPA property for the contractor to use during
performance of the contract. Such provisions describe the property,
timing and conditions for assignment, transfer, and use. This property
may include both materials to be incorporated in the contract work, as
well as, tools, facilities or equipment provided for the contractor's
use in performing the contract. It is the COTR\'s responsibility to see
that BPA provides the property it agreed to furnish to the contractor.

When BPA property is to be furnished, the COTR should take the following
steps:

\(a\) Contact the CO for instructions. The property management
representative in the Organizational Property Management Officer's
(OPMO) organization is available to the CO and COTR, as necessary, for
advice and assistance in administering the use of BPA property on the
contract;

\(b\) Find out where the BPA property is and make arrangements to get it
to the contractor on time. When considerable material is to be provided,
BPA may, particularly for larger construction projects, establish a
material yard at or near the work site where the contractor may inspect
and take possession of the property;

\(c\) Find out whether the BPA property is in proper condition for use
as intended. BPA is responsible to ensure that the property it provides
is as specified in the contract and fit for its intended purpose (unless
specified in the contract to be furnished in "as is" condition). The
sooner this is ascertained, the sooner any necessary repairs,
corrections, or other actions can be initiated and any delays in
contract completion avoided. Once inspected, the contractor is
responsible and financially liable for its safekeeping;

\(d\) Find out whether there are any special instructions or limitations
regarding use of BPA\'s property. If such instructions exist, see that
they are furnished to the contractor along with the property;

\(e\) Make sure a means exists for tracking BPA property, i.e., property
custodian, etc.; and

\(f\) Make sure, at the conclusion of the contract work, excess
materials and any tools or equipment provided will be inspected, and
that BPA will retake possession and responsibility of the property
returned by the contractor. If shortages are noted, the contractor is
charged in accordance with contract terms. If damaged, other than normal
wear, the contractor will be liable for its repair or replacement.

#### 4.4 COTR Performance Status Reporting.

After the COTR has analyzed the contractor\'s performance as indicated
in the contractor\'s progress reports and other available information,
the COTR shall promptly identify any actual or potential inadequacies
and schedule changes, inform the contractor of the inadequacies, and
find out how the contractor plans to remedy them. The longer problems
continue without corrective action, the more serious they become and the
more difficult they are to correct.

However, whether or not problems do exist on the contract, a key
responsibility of the COTR is to maintain communication with the CO
regarding contract administration activities and to provide the CO with
periodic, written performance or status reports. These reports give the
CO important information about contract deliverables, contractor\'s
technical and progress reports, contract payment and other matters. A
sample of a performance status report is shown in Exhibit 5. This report
may be adapted to specific needs in consultation with the CO.

\(a\) Routine Reporting: Normally when there are no significant events
to warrant special reporting from COTR to CO/COR, intervals of one month
are sufficient between written reports.

\(b\) Non-routine Reporting: Whenever exceptional events occur during
the course of the contract, the COTR should generate a non-routine
performance status report giving the appropriate details of the specific
event. For example, non-routine reports should be submitted when
inadequate work is noted, when all required work has been accomplished,
and when the final invoice has been received and processed. The CO may
also request non-routine reports from the COTR.

\(c\) Property Reporting: Contractors must furnish annual reports of
BPA-furnished property, and property purchased with Government funds by
August 31 of each year. COTRs will review these reports, and indicate
their receipt and acceptability on Exhibit 5. This will include a
determination that the property is still required by the contractor.

#### 4.5 Financial Monitoring.

Financial monitoring of the contract is another way to review the
contractor\'s progress and performance. COTRs should track actual
dollars billed as each invoice is approved and forwarded for payment.
(See subsection 6.2.4.) COTRs can monitor the contractor\'s progress by
reviewing actual costs expended relative to the stage of completion for
specific tasks, and compare dollars expended to the original dollars
estimated for those tasks. If the actual costs reveal an inconsistency,
the COTR should advise the CO of possible cost overruns
(cost-reimbursement or time-and-material type contracts). Financial
monitoring by the COTR can also assist the program manager and the CO in
determining if BPA is receiving the best buy for the money expended.

### SECTION 5 CONTRACT MODIFICATION.

#### 5.1 Contract Modification.

During the life of a project, it sometimes becomes necessary to
incorporate changes into the contract, or to provide coverage for
situations that develop after contract award. Some changes can be made
in accordance with the contract, but other adjustments not expressly
anticipated by the contract may also occur. In either case, where the
project\'s objectives, the method or manner of performance, cost, or
schedules are to be changed, modifications must be made to the contract.

The COTR should closely monitor the contractor\'s activities in
executing the contract\'s requirements. Except for a limited delegation
by the CO for construction contract field modifications, the COTR may
not authorize additional work beyond what is specified in the contract,
even if such work is within the general scope of the contract. The COTR
may be instrumental in the development of changes to a project or
modifications to a contract, but does not have the authority to order or
authorize the contractor to make such changes, technical or
administrative.

If it becomes apparent that the project requires a change, the COTR
should immediately notify the CO or COR. Only COs operating within the
scope of their authority may execute contract modifications on behalf of
BPA. Other BPA personnel, including COTRs, must not:

\(a\) Execute contract modifications;

\(b\) Act in a manner to cause the contractor to believe that they have
authority to bind BPA;

\(c\) Direct or encourage the contractor to perform work that should be
the subject of a contract modification;

\(d\) Permit a contractor to work past the expiration of a contract; or

(e) Change the contract statement of work or specifications.

Although the need for a contract change may become apparent during
reviews of the project by a COTR or other program personnel, no action
may legally begin on the change until a contract modification has been
prepared and approved in accordance with BPA\'s normal procedures.
Modifications are usually initiated by a Purchase Request (PR) or other
form of written request, prepared by the COTR or program manager. Until
such time as the PR or written request is submitted, a modification to
the contract recommended by the COTR will not be made.

#### 5.2 No-Cost Time Extensions.

While the general rule is to not relinquish a contract right without
receiving something in return (consideration), no-cost time extensions
may be authorized by the CO under limited circumstances. If the COTR
encourages, or even permits, the contractor to continue work after the
contract expires, a ratification action (see BPI Appendix 6-A, Section
3.5) may be required. Only COs may execute no-cost time extensions.

#### 5.3 BPA Caused Delays.

In those instances when an action or inaction by BPA delays the
contractor, the contractor may be entitled to compensation and/or an
extension of performance time. Therefore, the COTR must play a key role
in assuring that BPA meets it's contractual commitments, and if BPA
should be tardy, that any delays are minimized.

When BPA causes a delay, the COTR should immediately document the
reasons for delay, and send that information to the CO. In a similar
manner, if the COTR receives a statement from the contractor that a
delay has been caused by BPA, the same information should be provided to
the CO.

#### 5.4 Constructive Changes.

Sometimes BPA actions or inactions may lead contractors to believe that
a change in the contract has been ordered. The contractor is required to
advise the CO immediately if such a change is contemplated. COTRs must
be acutely aware of the impact of their actions on the contractor\'s
approach to performing the contract. The COTR must be very careful not
to encourage or direct the contractor to proceed in a manner other than
that specified in the contract. Such constructive changes are often the
basis for contractor claims of an equitable adjustment in the contract
price and/or time. The COTR is required to provide a written explanation
of the circumstances surrounding the constructive change.

### SECTION 6 ACCEPTANCE AND PAYMENT.

#### 6.1 Requirements for Acceptance.

The final step for the COTR before payment is "acceptance." The term
acceptance means that the COTR believes the supplies delivered or work
performed conform to the contract.

##### 6.1.1 Acceptance Defined.

Acceptance is documented acknowledgment that the supplies delivered or
work performed conform with contract quality and quantity requirements,
as well as with the other terms and conditions of the contract.
Acceptance formalizes, as a necessary step for final payment and
contract closeout (see Section 10), the approval of specific supplies
delivered or work performed on behalf of BPA as partial or complete
performance of the contract. To make certain of this fact, as was
previously described in Section 4 of this guide, the CO must obtain the
acknowledgement by the COTR or another person who can attest that all
contract requirements have been met. It is important that the COTR
understand the responsibility for contract acceptance.

While acceptance is necessary for final payment, certain types of
contracts provide for interim payments, before final payment. One form
of interim payment is based upon "partial acceptance," as with partial
delivery and acceptance of supplies under a supply contract or partial
acceptance of quantities of unit priced items of a construction
contract. Other contract types, such as construction, may permit
payments in advance of final acceptance, as per the "progress payment"
clause, which permits multiple progress payments during performance
based on the percentage or stage of work completion. Also, cost
reimbursement type contracts may require that BPA reimburse the
contractor, monthly or other frequency, for costs incurred by the
contractor during performance (see 6.2.2.2 of this guide). The basis for
acceptance and payment is all spelled out in the contract. It is
necessary, however, to look at more than just the payment clause. The
contract must be "read and interpreted as a whole," not just interpreted
per one clause or part. Therefore, the COTR needs to look at the
contract payment schedule of prices and quantities; statement of work or
specifications; and contract "boiler-plate" clauses, such as, the
inspection and acceptance clause and the various other payment-related
clauses. The COTR and other members of the contract administration team
need to read and be familiar with these contract terms and conditions
for acceptance and payment.

Other contract clauses refer to the "date of acceptance" as the basis
for action required by the clause, such as, the payment, prompt payment
act, and warranty clauses. It is after final acceptance that the
warranty period begins.

##### 6.1.2 Responsibility for Acceptance.

BPA disbursement procedures and Treasury regulations require, to the
maximum practicable extent, a separation of duties for those who are
authorized to procure, accept and pay for transactions on behalf of BPA.
This separation of duties provides internal controls to reduce risk of
error, waste, and wrongful acts. Therefore, except for established
construction contract practices, CO's are neither authorized to receive
and accept supplies or work performed nor disburse funds for the payment
of purchases that they have made. Similarly, while a COTR may be
assigned responsibility to accept supplies or work for a purchase, this
person may neither have authorized the purchase (unless authorized to
issue orders pre-priced by a CO per subsection 7.4 of this guide) nor
authorize disbursement of funds for its payment. In a similar manner,
those in Disbursement Operations must independently assess and certify
the proper disbursement of funds for a purchase, but may not have
ordered or received and accepted the supplies or work performed for the
contract disbursement.

The COTR accepting work performed or supplies delivered on behalf of BPA
is liable for a proper certification of its acceptance. This person must
have personal knowledge that the invoiced work has been completed or
that the supplies received are in the quantity and quality and condition
provided by the contract. If the COTR does not personally have knowledge
of the delivery or completion, the quality, or the quantity of the work
being invoiced, the COTR should not certify acceptance until consulting
with another BPA employee who does have the knowledge required for
acceptance. If the COTR believes, or is on notice, that some provision
has not been met, the acceptance should not be signed. Instead, refer
the matter immediately to the CO. So long as the person does not falsify
an acceptance certificate (for example, by accepting services not
rendered or supplies not received), there is effectively no personal
liability for hidden or obscure errors on the billing.

Another important condition for acceptance is to only enforce the
contract as written. The COTR may not insist on conformance to what the
COTR personally feels is required, unless that standard is also required
by the contract. Refer to the terms of the contract that describe the
COTR\'s role and responsibilities in accepting completed work.

Acceptance does [not]{.underline} mean that the COTR has audited the
invoice in the financial management sense of the word. The person
accepting the supplies/services is expected to use reasonable efforts
and best judgment in determining if the contractor has conformed to the
requirements of the contract. Reasonable verification of mathematical
accuracy and review of supporting documents required by the contract are
expected to be performed. If you do not know if the work performed or
supplies delivered meet the contract requirements or if the charges are
appropriate, the CO and/or the BPA Audit Staff should be contacted for
advice.

###### 6.1.2.1 Accepting Services.

A service contract requires a contractor to furnish time and effort to
perform an identifiable task. Procured service is performed through
processes, either those specified in a contract purchase description or
Statement of Work, whose timing of delivery (performance) has to
coincide with the performance period specified in the contract. The
service may be for the production of an end product, such as a report,
or continuous or cyclical in duration, such as office janitorial
services.

The inspection of services by the COTR may not, by its very nature, be
possible to inspect before performance. Therefore, the measure of
quality of service provided has both a tangible and an intangible
component. A tangible element may be, for example, either a report
produced or an office than is swept, mopped, vacuumed and dusted. The
intangible components of these same service examples are, in the case of
the report, the accuracy of data or soundness of conclusions. For the
office cleaning service, the intangible element may be the relative
degree of cleanliness. The basis for acceptance in the contract,
therefore, usually describes some measure of acceptability for services
rendered. The report, for example, is the final product, but the
Statement of Work may provide for "milestone" meetings of the COTR and
contractor or interim reporting by the contractor on data gathering
techniques, processes utilized, results obtained, and data produced.
Similarly, the office cleaning Statement of Work may provide for the
frequency of cleaning, extent, and some measure of cleanliness achieved
for each task, to be inspected by the COTR on each specified date of
performance. Therefore, when the service is performed, the COTR inspects
and certifies the acceptability of service rendered for payment, against
the standards of quantity, quality and basis for payment described in
the contract.

Typically the COTR will document acceptance of services on a
contractor's invoice submitted for payment, per the terms of the
contract. If for some reason acceptance of services will not be
documented on a contractor\'s invoice, the COTR should contact the CO to
determine the format and requirements of a receiving report.

###### 6.1.2.2 Accepting Supplies.

Supplies are tangible supplies, such as, deliverable end-items or
assemblies, components, parts, raw and processed materials, and tools,
but does not include real property or something intangible
(incorporeal), like a patent or copyright. The means used to describe
requirements for the purchase of supplies may range from commercially
available descriptions, described by brand name or equivalent or general
purchase description, to more detailed methods, such as, specifications
of physical or chemical characteristics, material and method of
manufacture or performance. Other methods of description include
engineering drawing, sample, individual standards, and standard
specifications.

Every contract for supplies must have a fixed or determinable quantity
of each item purchased, a basis for determining acceptability (quality),
delivery terms (such as FOB destination or FOB origin (or other place of
shipment) to spell out which party pays the expense of transportation
and when the risk of loss passes from the seller to the buyer), price,
payment terms and warranties. The requirements for contract performance
are the physical delivery of the supplies, inspection for compliance
with the contract description (including witnessing or conducting tests,
etc.), release for shipment (when required by the contract), formal
acceptance of the supplies, and payment. Various means are used by the
COTR and other team members to describe contract quality requirements
and to inspect for compliance with the contract description, as
described in the contract description and "boilerplate" clause terms and
conditions.

Commercial products typically will require only an inspection at the
time of delivery, unless otherwise specified, verification of quantity
and apparent damage, and acceptance indicating that the delivered
supplies conform to the contract. To make certain of this fact the
supplies must be inspected for quality. This inspection for quality is
in addition to normal receiving inspection for damage during shipment.
If the FOB is shipping point and the damage is found to have occurred
after it left the contractor's dock, then BPA is required to process the
invoice for payment and deal with the freight company regarding the
damages to the shipment. Invoices pertaining to supplies that have been
rejected should be held by the CO, pending notice of acceptance. The
COTR has the right to inspect the supplies for compliance with the
contract description before accepting the supplies, as per the
inspection and acceptance terms of the contract. If the supplies
received conforms to the contract requirements, the COTR or other
designated person prepares a receiving report and accepts the items on
behalf of BPA. The receiving report is either forwarded to the CO or
other designated contract administration personnel for review and
approval for payment, as specified in the contract. Alternately, the
contract may specify that the receiving report be sent directly to
Disbursement Operations. In any case, after approval, the receiving
report must be forwarded to Disbursement Operations by the fifth working
day after acceptance.

Supplies received that are different in quantity, quality, and price are
referred to the CO for resolution. If there is a substantial deviation,
or if the material is damaged, the COTR or the receiving and inspection
personnel will reject the supplies. A notification of rejection must be
forwarded to the CO.

###### 6.1.2.3 Accepting Construction.

Construction is the building, alteration, or repair (including dredging,
excavating, and painting) of buildings, structures or other real
property. Construction does not include exploratory drilling or other
investigative work for obtaining preliminary data for engineering
studies and which are not part of starting or continuing a construction
process. Neither does construction include the manufacture, production,
furnishing, building, alteration, repair, processing, or assembling of
personal property (supplies), or demolition without construction.

By its very nature, construction work is performed according to a very
different set of performance criteria than services or the manufacture
of supplies. Some of the performance cost elements can be measured very
precisely, but others involve significant risk taking and estimation,
particularly the unpredictability of the elements of nature and the
elements of performance. Performance is impacted by the availability of
skilled labor, tight scheduling and sequencing of work and delivery and
incorporation or movement of materials in stages, leading up to the
final project completion.

Acceptance of construction is typically accomplished in stages,
involving separately priced items of work and quantities at prices found
in the contract schedule of pricing. Therefore, partial acceptance is
frequently made. As an example, a station of access road (100 feet), a
square of roofing (100 square feet), or an hour of an electrician's
labor are a common basis for pricing and measuring discrete units of
work. The contractor is paid for those units completed within the
payment period. The formal acceptance of these separately priced units
generally occurs upon completion, billing and payment for all work
required to complete the payment item. The formal acceptance is
typically made by the CO, based upon the certification of acceptance by
the COTR, or other representatives of the CO, as per the construction
inspection and acceptance clause of the contract. (See Section 10 of
this guide for construction contract close-out, and final payment.)

##### 6.1.3 Acceptance Certification.

The certification of acceptance shall be made using the BPA Enterprise
Resource Planning (ERP) system. All original invoices (except utility
invoices) are to be mailed by the Contractor to Disbursement Operations,
with a copy of the invoice sent to the COTR. For service contracts, the
COTRs will certify acceptance for payment using the new ERP system.
Supply contract payment is triggered by the COTR or other person who
receives the supplies (could be a warehouse receiving or other person)
who accepts the supplies using an ERP system receiving report that is
electronically transmitted to Disbursement Operations. With
construction, the completed work may be billed by the contractor on an
invoice or prepared using a BPA payment form, the original of which is
sent to Disbursement Operations with a copy sent to the COTR or COR for
payment certification through the ERP system. The three-way match
process for payment of invoices will be entirely automated by the ERP
system, as will many other disbursement functions.

The Prompt Payment Act prescribes a very precise time period and process
for BPA to accept supplies or work performed. BPA is committed by the
terms of the Act and the contract to accept the supplies or work
performed within five work days after receipt, unless otherwise provided
in the contract. In addition, we must pay the contractor within 30 days
of acceptance or receipt of a proper invoice, whichever is later, unless
an improper (incorrect) invoice is specifically rejected in a timely
manner. These contract requirements are generally as stated in the
Prompt Payment provisions in the contract. If formal acceptance takes
place beyond the indicated acceptance period, BPA will be liable for
payment of an interest penalty payment to the contractor from the last
day of the indicated acceptance period. This concept is known as
constructive acceptance. Actual acceptance of supplies and services is
not jeopardized by this constructive acceptance. BPA is not required to
accept non-conforming supplies or services simply because the five
working day acceptance period has elapsed.

#### 6.2 Processing Invoices.

Processing invoices is a task performed in support of payment to the
contractor. The procedures for processing invoices are established by
Disbursement Operations. BPA is required by the Prompt Payment Act to
pay \"proper\" invoices within a specified period of time, usually 30
calendar days or less, or pay an interest penalty to the contractor.
Disbursement Operations may only make a payment after it has received
confirmation that the supplies or services have been satisfactorily
received. Prompt processing of invoices and receiving reports by COTRs
is essential to avoiding interest payment charges against program office
funds. Detailed information on processing requirements is contained in
the disbursement guidelines in the BPA accounting manual or by
contacting Disbursement Operations. The following information is
provided for general guidance only.

##### 6.2.1 Receiving Invoices.

Immediately upon receipt, the office receiving the invoice must clearly
stamp on the front of the first page of the invoice with the date
received and the receiving organization. The stamped receiving date of
the first organization or person designated in the contract to receive
the invoice may be used to determine the payment due date. The Prompt
Payment Act requires that the date placed on the invoice by the
contractor be used to establish the payment due date when the receiving
organization fails to date stamp or note when the invoice was first
received, unless the acceptance date is used. It is very important that
all offices note or date stamp the date of invoice receipt and the name
of the receiving organization on the invoice.

Because of stringent requirements in the contract for timely acceptance
of the supplies delivered or work performed, invoice review should begin
immediately after the invoice is received. If invoice review must be
delayed beyond the contractually permitted time, the COTR is responsible
for contacting the contractor and resolving whatever problem has
occurred. Note on the invoice when the contractor was called and the
date of resolution. This notation will protect BPA from making
unnecessary interest payments.

##### 6.2.2 Reviewing Invoices.

Generally, invoices for service contracts are forwarded to the technical
personnel, generally the COTR, so that acceptance of the services may be
recorded on the invoice itself. This has erroneously been interpreted to
mean that the COTR is responsible for the accuracy of each item on the
invoice. That is not the intent of the COTR\'s acceptance of the
services. Instead, the COTR is expected to apply only a
\"reasonableness\" check to the invoice. The COTR is not certifying that
each expense was audited and justified. However, a review of the invoice
and other financial data may provide information indicating reasonable
progress, or lack thereof, on the project. If you have questions about
the allowability of a cost item, immediately contact the CO. Only the CO
has the authority to disallow cost items.

The COTR should take note of the costs on the invoice and compare them
to those in the contract. If Disbursement Operations finds any
mathematical errors, they will make the adjustment and pay the proper
amount. Verifying costs is not the same as certifying that they are
correct. The COTR should question the contractor concerning invoiced
amounts when it appears that something unusual or unexpected is
occurring. If the billing for a specific period is unexpectedly high or
low, the COTR should request that the contractor supply the reason(s)
for the large deviation from what was anticipated.

Every invoice should receive a general review to ensure that all
required data is present. If the required data is not present, the
invoice is not proper and the allowable time to pay the invoice does not
begin. BPA has only seven days to notify the contractor of the defects
in the invoice; thus, prompt review is essential. A proper invoice must
contain the following required data: invoice date, contract number, task
order number, if applicable, contractor name and address, description
and quantities of products or services, unit and extended prices, and
the name, title, phone number, and complete mailing address of the
responsible official to whom payment is to be sent. The dates of
performance for services should be shown to ensure that multiple
payments are not made for the same services. If this essential data is
not present, contact the contractor to point out the inadequacies and
document that contact on the invoice. Alternately, a Notice for Improper
Invoices can be prepared (See Exhibit 7). Forward a copy of the notice
along with a copy of the rejected invoice to Disbursement Operations.

In the event the COTR does not understand the invoice or the invoice
appears to be in error or in other ways inadequate to support the
payment, the COTR should attempt to resolve the problem with the
contractor. Discussions with the CO will be helpful in resolving
problems. If the COTR is unable to resolve the problem with the
contractor, the invoice should be forwarded to the CO with an
explanation of why the invoice may not be certified and paid. The CO
will then contact the contractor to attempt to resolve the problem.

Following this general review, and before proceeding to the steps
described below, the COTR shall enter the proper accounting data on the
invoice: organization, activity code, PL-6, and object class if known.
If the COTR knows that this is the final invoice to be submitted under
the contract, that fact should be noted under the COTR\'s signature, and
a COTR performance status report (see Exhibit 5) should be submitted.

###### 6.2.2.1 Reviewing Fixed-Price Contract Invoices.

Invoices submitted under fixed-price contracts receive only a brief
review by the COTR to ensure that required data is present and that
amounts invoiced conform to the contract prices and payment provisions
in the schedule of items.

###### 6.2.2.2 Reviewing Cost-Reimbursement Contract Invoices.

Provisions of cost-reimbursement contracts obligate BPA to pay the
contractor the allowable, reasonable, and allocable costs of performing
the contract (plus, in some cases, a fee or profit).

Because the technical expertise of the COTR is essential to
understanding the necessity for direct costs on the project, the COTR
should review the reasonableness, allowability, and allocability of
costs claimed for reimbursement. The COTR should also assure that the
contractor submits adequate documentation of costs as required in the
contract. Contact the CO if you are unsure how much documentation is
needed.

\"Allowable\" costs are those permitted by the standards set forth in
BPI Part 13 (See Appendix 13-A). Special provisions in the contract may
also affect the allowability of specific costs.

Whether it is \"reasonable\" to incur specific costs for performing a
particular type of work is a question that can best be answered by an
individual familiar with what is involved in performing that type of
work, and who has the technical qualifications to make an informed
judgment. The materials or effort may be \"unreasonable\" in that they
exceed or differ from what is necessary to complete the contract work.
Detecting unreasonable direct costs is the responsibility of the COTR.
If unreasonable costs are noted, contact the CO for advice.

A cost is properly \"allocable\" to a contract if it is incurred
specifically for the contract or is incurred by the contractor for other
activities that also benefit the contract. The COTR\'s actions with
regard to the allocability of costs claimed will be to spot direct costs
that appear to have no connection with the contract work. If the reason
for billing materials or specific labor hours to perform the contract is
not clear, it may be that the costs were charged to the contract in
error.

Many contracts require the contractor to submit periodic financial
reports showing the total costs incurred during the last reporting
period, cumulative total, etc. To be useful, such reports should \"key
in\" with a financial expenditure plan or budget for the entire
contract, so actual costs can be compared with planned costs, shortfalls
in estimates can be identified, and timely management decisions
regarding additional funding can be made and implemented.

The checklist in Exhibit 8 may be used as a guide when reviewing
invoices for cost-reimbursement contracts. If used such a checklist is
used, it should be filed in the COTR\'s contract administration file.
When the unexpended balance declines below the amount needed to complete
the work, the COTR must discuss with the CO the future of the contract
and the project.

###### 6.2.2.3 Reviewing Time-and-Material Contract Invoices.

Review of time-and-material contract invoices is substantially the same
as for cost-reimbursement contracts except that only the number of hours
billed need be reviewed for reasonableness and compared to the progress
on the project. It is important to review the composition of the hours
billed if the contract has different labor rates associated with the
different competence and skill levels, i.e., partner hours, senior
manager, staff accountant, or senior technical engineer versus
engineer/draftsman. Some firms have an internal practice of charging a
pro rata portion of \"senior\" hours for a given number of junior hours
and attempt to justify it on the basis of \"standard\" managerial review
and oversight experience within their firm. If the COTR has reason to
believe that the invoice includes such estimated amounts, the COTR
should question the contractor concerning these costs. Direct costs,
i.e., the material portion of the invoice including travel costs, are
reviewed in the same manner as cost reimbursement contracts (See Exhibit
8).

##### 6.2.3 Forwarding Invoices.

Immediately following review of the invoices, original invoices
containing the acceptance of services statement will be forwarded to
Disbursement Operations. The COTR should retain a copy of the invoice in
the COTR file and forward a copy to the CO, attached to the status
report.

##### 6.2.4 Recording Invoices.

A Contract Invoice Control Sheet as shown in Exhibit 9 or similar
computer spreadsheet is useful for logging each invoice processed.
Special attention should be paid to the column headed \"Remaining
Funds.\" COTRs should compare this total after processing the invoice to
ensure that sufficient funds remain to permit completion of the contract
work.

### SECTION 7 PLACING DELIVERY OR TASK ORDERS.

#### 7.1 Understanding Delivery or Task Order Contracts.

BPA often knows that it will have requirements for specific supplies or
services, but does not know exactly how much it will need or when it
will need them. Delivery orders (supplies) or task orders (services or
construction) give BPA flexibility in meeting its needs. The term
"delivery order" or \"task order contract\" is sometimes used to refer
to both a master contract (indefinite quantity/delivery contract) and to
a master agreement. Master agreements, however, are not contracts. The
contractual commitment is created only when an order is issued under the
master agreement.

In administering any ordering arrangement, the COTR must be aware of the
clauses in the contract or agreement specifying who may place orders and
how the orders are to be placed. The COTR should work closely with the
CO to establish procedures for the ordering process.

#### 7.2 Administering Delivery or Task Order Contracts.

The COTR\'s duties in administering ordering contracts are the same as
in administering other types of contracts: To assure that the contractor
adheres to the purchase description, performance periods, and completion
of deliverables as stated in the task order.

#### 7.3 Preparing Requests for Delivery or Task Orders.

A delivery or task order is prepared in the manner and in the level of
detail as required by the master contract or agreement upon which the
order is based. See BPI 7.2.5 for more details.

##### 7.3.1 Preparing Delivery Orders.

A deliver order will contain all of the information required to describe
the terms of the order: Line item description for each item, quantity,
unit of issue, and unit and extended prices, FOB point, delivery
location, delivery period, accounting information, and COTR designation
or other person or organization for inspection and acceptance. The terms
and conditions for administering the order are those of the master
contract or agreement.

The purchase description or specification required for a delivery order
is often contained in the master contract or agreement, and referenced
in the delivery order. However, the master agreement or contract may
provide for a separate purchase description or specification, to be
attached to each order.

##### 7.3.2 Preparing Task Orders.

The task order will contain, similar to the delivery order, the
necessary description of the work, whether for service or construction.
For services, the work typically will be described using either a
purchase description, particularly for commercial services, or a
Statement of Work. Construction work may, similarly be described either
using a purchase description for commercial construction or using a
specification, with drawings as necessary. The task order purchase
description, Statement of Work or specification should be clear and
precise. (See BPI Appendix 6-A, Requisitioners\' Guide to Preaward
Activities, for the requirements for supply, service and construction
type transactions.) The task order document communicates to the
contractor the specific tasks to be performed. A vague, unclear, or
unnecessarily broad work description may prevent the contractor from
accomplishing the exact task desired. Ways to help assure that task
order wording is clear and precise include:

\(a\) Review of the draft task order by other BPA project personnel
acquainted with the program involved. Ambiguities and other inadequacies
can often be spotted by a knowledgeable person who has had no
involvement with writing the draft task order.

\(b\) Review of the draft task order by the contractor to assure mutual
understanding can uncover matters that are not clearly expressed.
However, the contractor must [not]{.underline} be asked or permitted to
draft task orders.

Work described in the task order must fall within the \"scope\" of the
contract. Task orders must describe particular work that falls within
the general description of services or construction that the contractor
has agreed to perform. If BPA wants work done that is not covered by the
task order contract, then the purchase of such work should be handled as
a new contract action. If in doubt, the COTR/program office should
contact the CO/COR.

Work described in the task order should be achievable within the dollar
and time limitations of the contract. BPA practice treats the contract
completion date of a contract as the end of the contractor\'s
obligations unless the contract or task order specifies that task orders
issued prior to the contract completion date may continue until
completion of the task regardless of the contract completion date.
However, this must be clearly stated in the contract or task order.

#### 7.4 Issuing Delivery or Task Orders.

The majority of delivery or task order contracts require that orders be
authorized and issued by the CO. However, COTRs may be authorized by the
CO to issue task orders up to a specified amount under certain limited
circumstances, such as when the pricing is fixed per the terms of the
master contract or agreement. In such cases, the contract will
specifically state the limits of the COTR to issue orders.

##### 7.4.1 CO Issues the Order.

While the CO normally issues the order to the contractor, the COTR is
generally responsible for preparing and submitting the technical
description of the work to be performed or supplies delivered (purchase
description, SOW or specification) and a purchase request. The CO
conducts necessary negotiations and or clarifications needed and issues
the order. COTRs may be asked to conduct some of the discussions with
the contractor but are not authorized to direct the contractor to
proceed with the work until the order document is signed by the CO.

##### 7.4.2 COTR Issues the Order.

In those instances when the COTR has been delegated authority in the
contract to issue orders without CO review or approval, the following
steps must be taken:

\(a\) COTR will obtain funding approval for the order. This approval may
require a PR if the COTR is using funds from a different organization.

\(b\) Any required clarifications will be conducted by the COTR. Once
agreement has been reached with the contractor, the COTR will prepare
and sign the task or delivery order and distribute copies as directed by
the CO. The task order will be documented as defined in BPI Part 12.

\(c\) The COTR will distribute the order to all parties. Forward a copy
of the order to Disbursement Operations. Send a copy of the order and
the PR, if one is created, to the CO, and send the order to the
contractor who is to perform the work.

### SECTION 8 REMEDIAL ACTIONS.

#### 8.1 Initial Action When Contract Requirements Are Not Being Met.

Once the existence and cause of a technical discrepancy or performance
delay are identified and it is determined that the contractor is not
complying with a specific requirement called for in the contract, the
COTR should make sure that the CO and project management are informed of
the circumstances in a timely manner so that alternatives for dealing
with the problem may be adequately assessed. The COTR should also
immediately call the contractor\'s attention to the discrepancy and seek
the contractor\'s voluntary commitment to remedy the failure. If the
contractor agrees that the problem exists and will remedy it, the COTR
should document the discussion in a letter to the contractor with a copy
to the CO. After the contractor has had an opportunity to remedy the
problem, the COTR should follow up to see if remedial action was taken.
Results of the follow-up should be documented.

The COTR may not direct the contractor on a course of action to fix the
problem. It is up to the contractor to choose whatever course of action
is appropriate to remedy the problem unless BPA must direct specific
actions to protect its own interest. If the latter is necessary, the CO
must be advised. COTRs may not order corrective action.

The COTR\'s task is to avoid surprises caused by improper or delayed
performance after it is too late to cure it. Timely action by the COTR
affords program management and the CO the chance to make decisions based
on the maximum number of options. It also minimizes adverse program
impact of delay by providing an opportunity to revise planning at an
early stage.

##### 8.1.1 Contractor Agrees with COTR.

When the contractor agrees that the contract requirements are not being
met, there are several possible courses of action available to the
contractor. If the contract is fixed-price, the risk is on the
contractor to remedy the problem at its own expense, unless a
remedy-granting provision provides otherwise. If the contract is
cost-reimbursement and the contract clearly defines standards for
acceptance, the contractor must pay the costs of rework. However, in
cost reimbursement contracts without such standards, BPA must pay all
reasonable, allowable, and allocable costs to remedy the problem. BPA,
therefore, has a major role in deciding how to address the problem. For
example, the work might be speeded up by using more people or overtime,
but the availability of more qualified personnel and/or the availability
of program funds for more workers or overtime need to be explored and
decided on by the CO based on the recommendation of the program office.

##### 8.1.2 Contractor Disagrees with COTR.

The contractor may disagree that contract requirements are not being
met. The COTR should then discuss the matter with the contractor to
discover the basis for the contractor\'s position. If the COTR still
feels that the contractor\'s position has no reasonable basis, the COTR
should advise the contractor of the need to take corrective or other
action necessary to meet the requirements of the contract. Such advice
needs to be confirmed in writing with a copy to the CO. (Written notice
is important to document BPA\'s case if an adverse action, such as
suspension of work or termination, is later required.) The giving of
such advice is part of the COTR\'s primary task of ensuring that the
contractor does what was promised in the contract. By the same token,
the COTR must not direct the contractor to do more than or different
from what the contract specifies. Such a direction would exceed the
COTR\'s authority.

If on the other hand the COTR considers that there is or may be
reasonable basis for the contractor\'s position, the COTR should discuss
the matter with the CO to see what course of action should be taken to
resolve whether the contractor is complying with the contract or not.

#### 8.2 Dealing with Failure to Comply.

If the contractor fails to comply with a contract requirement within a
reasonable time after the deficiency has been identified, the COTR
should report all facts to the CO in writing. The report should contain
a recommendation to the CO to take appropriate action. A letter may be
sent to the contractor pointing out the failure of performance and its
importance to BPA and requesting the contractor to meet with the CO to
discuss the situation and the contractor\'s plans for remedying it. Such
a letter can be beneficial in assuring that top management in the
contractor\'s organization is aware of the problem and in enlisting its
support for corrective action. However, if the departure from contract
requirements is so serious that further performance would be a waste of
money and if it appears that the contractor will not or can not remedy
its failure, the COTR should recommend that the CO terminate the
contract pursuant to the appropriate contract clause.

#### 8.3 Conduct in Case of an Overrun.

When the contractor\'s incurred costs reach the stated estimated costs
and the obligation to proceed is suspended, the contractor is obligated
to notify BPA. It is important that BPA program personnel not request or
encourage the contractor to continue work unless directed to do so by
the CO. Boards of Contract Appeals have held that such action will
legally obligate BPA to reimburse the contractor for continuing with the
work. This action exceeds the COTR\'s authority and will lead to
increased BPA expenditures.

On the other hand, fairness requires that BPA not keep the contractor in
suspense. The COTR should facilitate a prompt determination of whether
or not BPA will fund and authorize continuation of performance. When the
decision is made, based on program office advice as to whether
additional funds will be provided, the CO is responsible for informing
the contractor. If funds are provided, such increase in funds can only
be added to the contract by a contract modification signed by the CO
(See Section 5).

#### 8.4 Disputes.

In the course of performing BPA contracts, disputes may arise between
BPA and the contractor over rights and obligations under the contract.
Typical disputes concern such questions as: which
interpretation\--BPA\'s or the contractor\'s\--should be attached to
ambiguous contract language; what constitutes an \"equitable\"
adjustment for a particular contract change\--the amount allowed by the
CO or a larger amount claimed by the contractor; or how much delay was
caused the contractor by BPA action/inaction or other valid reasons and
is, therefore, \"excusable\"? As BPA\'s primary liaison with the
contractor, the COTR may be the first person aware of differences of
opinion between BPA and the contractor.

When the COTR discovers a difference of opinion regarding the rights or
obligations of either party under the contract, the COTR should promptly
initiate discussions with the contractor to find the basis for the
contractor\'s position. The aim should be to resolve the disagreement by
arriving at a mutual agreement. The COTR should also let the CO know
about the disagreement, including the positions of the COTR and the
contractor, and, if it appears that the COTR can resolve the matter with
the contractor, the COTR should review the proposed solution with the
CO. These actions should be completely documented in writing to the CO.

The contract\'s Disputes clause empowers the CO to issue a decision on
the matter if the contractor and the CO cannot arrive at agreement on
what the contract requires. The clause directs the contractor to proceed
with performance of the contract in accordance with the CO\'s decision.

#### 8.5 Suspension of Work.

BPA actions that cause the contractor to proceed on a schedule other
than that originally anticipated may cost the contractor more than
planned. These additional costs generally must be borne by BPA. However,
if the contract contains a \"Suspension of Work\" clause, BPA has some
rights to stop the contractor\'s activity pending certain developments
or actions on the part of either party, even though, depending upon the
circumstances, BPA may still have to pay for stopping the contractor's
activity. Therefore, suspending the contractor's work must be for good
reasons. The usual practice is that the CO is normally the only
individual authorized to suspend work on a contract. In the case of
observed unsafe practices, however, the contract "Safety and Health"
clause permits any member of the contract administration team (CO, COTR,
or field inspectors), with probable cause, to suspend the contract work
in those areas or locations of the contract work affected by the unsafe
practice.

When the COTR believes that a temporary suspension of work is
appropriate, the CO should be notified immediately.

#### 8.6 Claims.

A claim is a written demand by one of the contracting parties seeking
the payment of money, adjustment of contract terms, or other relief
arising under the contract.

Some typical reasons for claims from the contractor include:

\(a\) A change in BPA\'s requirements during the conduct of the
contract;

\(b\) The contractor encountered conditions different from those BPA led
the contractor to expect;

\(c\) BPA redirected the contractor\'s efforts after the contract was
underway; or,

\(d\) BPA delayed the contractor.

Occasionally BPA may also feel that it has a claim against the
contractor. Typical reasons for such claims include:

\(a\) The contractor is late in delivering the required services and BPA
incurs damages because of the late delivery; or,

\(b\) The contractor adversely impacts other BPA contractors or
operations.

The most important functions of a COTR in a claim situation are to
immediately notify the CO and to investigate the circumstances
surrounding the claim. The COTR should promptly investigate the basis
for the claim and send a written report to the CO. The COTR is not
authorized to issue decisions on claims, but may discuss with the
contractor the basis for the claim if so directed by the CO. The CO may
also ask the COTR to begin the negotiation process in an attempt to
settle the claim. However, the COTR must not give the impression to the
contractor that the claim is being settled or that the COTR has
authority to do so.

#### 8.7 CO Final Decisions.

When a contractor files a contract claim against BPA, the CO must
determine its merit and negotiate a contract adjustment or issue a final
decision on that claim. Generally, the claim filed by the contractor
will have been discussed with the COTR and perhaps the CO prior to a
written assertion of the claim by the contractor. During these
discussions, it will become obvious whether BPA agrees or disagrees with
the contractor\'s claim.

If BPA agrees that the Contractor\'s claim is valid, the CO will,
following negotiations, prepare a contract modification to make the
necessary adjustment in the contract price or other terms/conditions.
Most claims are adjusted through contract time extensions or payments of
money.

However, if the CO and the contractor disagree on merit or adjustment
and a claim is filed, the CO must issue a formal, final decision in
writing. This final decision will address all elements of the
contractor\'s written claim based on written information provided by
COTR and other affected parties.

#### 8.8 Termination.

The object of termination is to cut off further expenditure of BPA funds
for continued effort by the contractor. There are four types of
termination actions that may be included in BPA contracts. Read the
contract you are administering to determine what courses of action are
available to you.

Termination for default is used when the contractor has failed to
fulfill a significant requirement of the contract. As a rule, BPA cannot
recoup amounts already expended for deficient performance, but it may
recover excess costs of obtaining the same or similar services from
another source in cases of termination prior to the contract
delivery/completion date under firm fixed-price contracts.

In potential default termination situations, a key responsibility of the
COTR is to give timely notice to both the contractor and CO when the
contractor is in noncompliance. The contractor must take whatever
actions it determines necessary to assure compliance. However, if the
COTR knows of noncompliance, the COTR must advise the contractor rather
than waiting until the noncompliance requires a default termination
action. The COTR may not terminate a contract.

In the event of default termination action, the contractor has the right
of appeal. Documentation obtained by the COTR will be extremely
important for use if the contractor appeals the CO\'s actions.

Under cost-reimbursement contracts, even where a right to terminate for
default is included in the contract and may properly be exercised, the
contractor is normally entitled to reimbursement for expenses incurred
up to the time of termination, unless the work performed does not
conform to the standards of acceptance stated in the contract. BPA
applies the same rule to time and materials contracts.

Termination for the convenience of BPA is normally used when BPA\'s
requirements have changed to such an extent that continuation of the
contract is not in BPA\'s interest; however, the contractor\'s
performance has not breached the contract. When the right to terminate
for the convenience of BPA is exercised, the contractor is entitled to
compensation for work done prior to the termination.

In some contracts both BPA and the contractor have a mutual right of
termination. In such contracts the parties may negotiate the end of
performance. Termination by mutual consent is used when the work under
the contract is not progressing satisfactorily, and both parties want to
stop the work. Normally, no payment by either party will be made to the
other to compensate for the termination.

Termination for the convenience of either party gives to the contractor
the same right to terminate at any time that BPA has traditionally
reserved for itself. This type of termination is included in a contract
only when deemed necessary by the CO to establish a viable business
agreement and is advantageous to BPA. This type of termination is
normally not used for firm fixed-price contracts. For cost or time and
materials type contracts, the contractor exercising this right will be
paid for work completed as of the date of termination.

The COTR plays a key role in potential or actual termination actions.
The COTR is responsible for documenting circumstances that may lead to
the need to terminate the contract. In a situation that could lead to a
termination action, it is the responsibility of the COTR to advise the
CO in a timely manner so that necessary negotiations are not delayed.

### SECTION 9 ADMINISTERING INTERGOVERNMENTAL CONTRACTS.

#### 9.1 Nature of Intergovernmental Contracts.

Intergovernmental contracts (IGCs) are legally the same as the contracts
discussed in other parts of this Guide, but they are with entities such
as other federal or state agencies, Indian Tribes, etc. An
intergovernmental contract binds both parties to perform: The
contractor-agency provides a service, and BPA reimburses the costs. The
intergovernmental contracts are as legally binding and enforceable as
are contracts with commercial enterprises. Some characteristics of
intergovernmental contracts include:

\(a\) There are generally fewer terms and conditions (less boilerplate)
in an IGC;

\(b\) The transaction is with a governmental body at the Federal, State,
or local governmental level, a publicly owned college or university, or
an Indian Tribe;

\(c\) Intergovernmental contracts are usually of the cost-reimbursement
type. This means that the risks and costs are borne primarily by BPA,
and that the governmental body will recover essentially all of its
costs. Cost reimbursement intergovernmental contracts have specific cost
principles, listed in BPI Part 13, and cited in the contract. The
contractor agency may bill BPA only for costs that are reasonable,
allowable and allocable under the intergovernmental contract; and

\(d\) Termination provisions are usually mutual, and do not contain the
remedies for failure to perform found in most contracts with the
commercial sector.

#### 9.2 COTR Responsibilities.

COTR attention to performance under an intergovernmental contract is
just as critical as with the other contracts described in this Guide.
Close monitoring is essential to ensure that the project is conducted in
an efficient and businesslike manner. Basic steps and actions outlined
in other parts of this Guide apply generally to IGCs. Although the terms
and conditions of intergovernmental contracts are less stringent than
contracts with the private sector, the need for project accomplishment
in a timely, efficient manner is just as critical to BPA.

#### 9.3 IGC Billing Procedures - Contracts with Other Federal Agencies.

Payments on the majority of contracts entered into with other Federal
agencies are disbursed using the U. S. Treasury\'s On-Line Payment and
Collection (OPAC) system. Under these systems, payments are initiated by
the contractor agency. BPA receives a computer-generated billing
statement through the Government-on-Line Agency Link System (GOALS).
Funds are automatically transferred between the contractor agency\'s and
BPA\'s account with the U. S. Treasury upon Treasury\'s receipt of the
billing. This is generally accomplished before BPA can perform the
acceptance and invoice review processes described in Section 6.

Even though funds have already been disbursed to the contractor agency,
BPA has an opportunity to review and, if necessary, to correct the
billing, generating a credit or charge back entry to the account of the
contracting agency.

Disbursement Operations sends the hard-copy billing to the COTR for
receipt and acceptance. This hard-copy billing, which should include all
necessary supporting documentation, needs to be reviewed and accepted or
rejected with an accompanying explanation and returned to Disbursement
Operations promptly so that credits can be claimed in the time allowed
and so that the charges can be input into BPA\'s financial information
reporting system.

Acceptance of supplies or services provided by Federal agencies under
IGCs is performed in the same manner described in subsection 6.1.

Review of the billings by the COTR is performed in the same manner as
the review of commercial invoices. In the event problems are discovered
during this review, the CO should immediately be contacted and advised
of the problem. The problem should then be documented in a memorandum to
the CO.

#### 9.4 IGC billing procedures - other than federal agencies.

Generally, billings submitted by Governmental organizations other than
Federal agencies are received and reviewed for reasonableness in
essentially the same way as those submitted by commercial organizations.
COTR responsibilities and procedures for acceptance of services and
invoice review are the same as those described in Section 6.

### SECTION 10 COMPLETION AND CLOSE-OUT.

The COTR determines when the work has been completed in accordance with
the technical requirements of the contract, including any contract
extensions or renewals. This is done by inspecting all deliverables
promptly upon receipt to determine acceptability. Administrative matters
such as the disposition of BPA-furnished property should be attended to
as soon after physical completion of the contract as possible. When all
items required by the contract have been delivered and accepted, the
COTR notifies the CO by submitting a COTR performance status report.
(See Exhibit 5.) Contract close-out is triggered by this notification.

Prompt initiation of contract/intergovernmental contract close-out
allows the COTR to obtain firsthand information from other individuals
who were personally involved with the contract/intergovernmental
contract. Resolution of open matters is more difficult when personnel
have moved to other jobs and their recollections become vague.

The COTR may have additional responsibilities concerning formal
certification of completion and acceptance (such as obtaining or
confirming delivery of BPA-furnished property certificates, supply test
reports, final drawings, instruction books, and any other final
deliverables, as specified in the contract), and other issues related to
formally closing the contract. The COTR need not initiate these
additional documents; they will be requested from the COTR by the CO
when required.

For construction work, additional steps of final inspection, obtaining a
release of contractor's claims, and settlement of claims are typically
performed as a part of the close-out process. The COTR or field
inspector determines when the work has been substantially completed in
accordance with technical requirements of the contract and conducts a
final inspection, developing a "punch list" of those remaining contract
items to be resolved. Besides the punch-list items, the COTR or field
inspector addresses all remaining administrative matters related to
close-out, such as receipt of all special warranty documentation,
Operation and Maintenance Manuals, spare parts and disposition of
BPA-furnished property. When all items required by the contract have
been completed, the notice of final inspection is sent to the CO with a
copy to the COTR, if performed by the field inspector. On larger
contracts, and some smaller as well, the contractor is typically
required to submit a release of claims prior to BPA making final
payment. Unless specifically listed on the release form, the contractor
may not submit any further claims under the contract. Once a release of
claims is received, any remaining payment is processed, even if some
claims are still pending resolution, such as those previously submitted
or noted as a condition of the contract release of claims.

### SECTION 11 STANDARDS OF CONDUCT.

#### 11.1 Business Ethics.

BPA business must be conducted in a manner that is above reproach, with
complete impartiality and preferential treatment for no one. Although
Federal laws and regulations restrict the actions of Government
personnel, their official conduct must be such that they would have no
reluctance making full public disclosure of their actions. It is
important that BPA personnel observe proper standards of conduct in the
discharge of their official duties, especially those duties involved in
purchasing programs.

All BPA employees must clearly understand the standards of conduct for
power and transmission operations. BPA adopted the Standards of Conduct
of the Federal Energy Regulatory Commission (FERC) Order No. 889,
separating its wholesale power marketing function from its transmission
system operation and reliability functions, and to conducting its future
operations per the order.

The basic rules are that\--

\(a\) Access to information on BPA's transmission availability, price,
uses or potential uses cannot be discussed with BPA's power marketing
employees;

\(b\) No BPA transmission operations and reliability employees can take
part in BPA power marketing functions, such as buying and selling power;

\(c\) BPA employees who provide services shared by both BPA transmission
operations and reliability operations and BPA power marketing
operations, and who have access to information on transmission price and
availability, cannot discuss such information with BPA power marketing
employees; and

\(d\) BPA power marketing employees can only have access to BPA
transmission availability, price, uses or potential uses only through an
Internet site: the Open-Access Same-time Information System (OASIS).

It is BPA policy not to interfere in the private lives of its employees;
however, certain other standards of conduct are required. These are
published in detail and available to all personnel (see Standards of
Ethical Conduct for Employees of the Executive Branch, 5 C.F.R. Part
2635, BPI Part 3 and Appendix 3-A). Adherence to these standards
requires that employees not do indirectly what would be improper to do
directly.

Because of their importance in purchasing activities, BPA personnel
should be familiar with the following selected standards:

\(a\) No employee shall receive any salary or compensation for services
as a Federal employee from any source other than the Government of the
United States, except as may be contributed out of the treasury of a
State, county, or municipality.

\(b\) Employees shall not engage in any outside employment or other
outside activity in conflict with the full and proper discharge of the
duties and responsibilities of their BPA employment.

\(c\) Acceptance of gifts, entertainment, or favors (no matter how
innocently tendered and received) from those who have or seek business
with BPA, may be a source of embarrassment to BPA and to the employee
involved. It may affect the objective judgment of the recipient and
impair public confidence in the integrity of the business relations
between BPA and industry. Therefore, BPA employees shall not knowingly
solicit or accept any gifts, entertainment, or favors, either directly
or indirectly, from any interested party. (Complimentary meals and
beverages or other de minimus gifts may be accepted under certain
conditions, see 5 C.F.R. Part 2635.) For the purpose of this standard,
gifts, entertainment, and favors include any benefits, gratuities,
loans, discounts, tickets, passes, transportation, accommodations, or
hospitality given or extended to or on behalf of the recipient.

\(d\) An employee shall not directly or indirectly use or allow the use
of BPA property of any kind for other than officially approved
activities. An employee has a duty to protect and conserve public
property, including equipment, supplies, and other property entrusted or
issued to the employee.

\(e\) BPA employees must not directly or indirectly use official
information for private gain which has been obtained through the
employee\'s BPA employment if the information has not been made
available to the general public.

\(f\) Employees are prohibited from endorsing the proprietary products
or processes of manufacturers or the services of commercial firms for
advertising, publicity, or sales purposes. Use of material, products, or
services by BPA does not constitute official endorsement.

Public confidence in BPA employees clearly demands that each employee
take no action that would constitute the use of official position to
advance personal or private interests.

#### 11.2 Conflicts of Interest.

Technical and contracting personnel must observe standards of conduct
and avoid conflicts of interest with suppliers or potential suppliers of
BPA to obviate any possible inference that BPA may be compromised by an
employee\'s actions.

A few key points relating to conflicts of interest in purchasing matters
are:

\(a\) Employees, or their families, shall not have a direct or indirect
financial interest that conflicts substantially, or appears to conflict
substantially, with the employee\'s BPA duties and responsibilities.

\(b\) Employees, or their families, shall not engage, directly or
indirectly, in a financial transaction as a result of, or primarily
relying on, information obtained through BPA employment which has not
been made available to the general public.

\(c\) Unless authorized to do so, no employee shall participate as a BPA
employee in any matter that the employee knowingly has a financial
interest.

Questions should be directed to BPA\'s ethics official in the Legal
Services.

#### 11.3 Purchasing Standards of Conduct.

BPI purchasing policy prohibits certain actions by BPA employees,
consultants, and advisers, and by competing contractors involved in the
conduct of any BPA purchase of supplies, services, or construction. The
prohibited actions relate to (1) post-employment restrictions, (2)
discussion of future employment, (3) gratuities, and (4) disclosure of
proprietary or source selection information. BPA regulations
implementing the policy are in BPI Part 3 and Appendix 3-A.

#### 11.4 BPA Harassment Policy.

Under BPA policy, harassment will not be tolerated in the BPA workplace.
With regard to contractors, harassment may occur either between
contractor employees or between BPA and contractor employees. The role
of the COTR when contractor employees are or may be involved in
harassment, is to direct complaints to the contractor\'s management for
resolution. COTRs are not to participate in complaint resolution.

Contractors working on-site at BPA are subject to BPA policies,
including harassment-free workplace, through the inclusion of Clause
3-8, Contractor Compliance with BPA Policies, in their contract.
Violations of the clause may result in termination of the contract for
default. The CO should be informed of all pertinent facts in such
situations. Further guidance on dealing with harassment is provided in a
booklet published by Human Services, Diversity and EEO, and is available
at all service centers and field personnel offices.

### SECTION 12 DOS AND DON\'TS FOR COTRs.

#### 12.1 DOS.

Maintain a teamwork relationship, keeping the contracting officer fully
informed and current on major problems concerning the contractor\'s
performance, costs, or adherence to clauses.

Have a copy of the contract and all changes and modifications readily
available, and be familiar with and understand all facets of the
contract.

Maintain a separate file for each contract.

Work with the contractor, within your authority, as needed to get the
job done.

Assure that any required security screening is completed before allowing
contractors access to BPA ADP resources.

Attend scheduled meetings between the contracting officer and the
contractor.

Monitor the contractor\'s work to ensure performance consistent with
contract requirements within the time and cost parameters stated in the
contract.

Provide periodic information to the contracting officer about the
contractor\'s progress.

Verify that unsatisfactory contractor performance is corrected,
including observed unsafe practices affecting safety.

Ascertain that BPA property is being used properly and that appropriate
measures are being taken to protect and safeguard it.

Assure that the contractor is providing timely response to all
correspondence, and be timely yourself.

Verify that the contractor has the correct personnel performing the
contract work and a need exists for overtime (when the contract type,
i.e., time and materials, requires such review).

Follow up on corrective actions by the contractor as recommended by an
authorized inspector(s).

Ascertain that all emergencies are attended to and resolved immediately.

Give notice of technical non-compliance (technical direction) to the
contractor in writing. If such notice is given orally, follow up with a
written confirmation.

Have regular and frequent contact (as necessary) with the contractor to
ensure awareness of any potential concerns.

Ensure that your replacement is thoroughly briefed, both verbally and in
writing, on all important issues.

Conduct contractual compliance checks and accurately record the
information discovered.

Document significant actions, conversations, etc. as they occur.

Complete review and response regarding drawings, submittals, and other
documents within the time specified in the contract.

#### 12.2 DON\'TS.

Award, agree to, or execute a contract or contract modification. (Note:
An exception is a construction contract field modification issued by a
COTR or field inspector within delegated limits, as set by the CO).

Obligate, in any way, the payment of money by BPA unless delegated
specific authority to do so.

Make a final decision on any matter that would be subject to appeal
under the disputes clause of the contract.

Take action to terminate the contractor\'s right to proceed. (Note:
Safety issues may require immediate action including suspension of
contract work, with probable cause, for those areas affected by unsafe
practices. See BPA Safety Manual.)

Approve work that is not in conformance with the contract requirements.

Make a final determination of contractor liability for loss or damage to
BPA property.

Monitor the contractor so closely that you interfere with the
contractor\'s work.

Encourage the contractor to perform effort not specified in an existing
contract.

Accept special favors or gratuities from the contractor.

Tell the contractor [how]{.underline} to carry out his/her
responsibilities within any facet (technical, management, cost, or
provisions) of the contract.

Commit the equipment, supplies, or personnel of the contractor for use
by others.

Delay or cause to be delayed any correspondence or reports that require
immediate response from the contractor, the contracting officer, or
other BPA officials.

Create an employer-employee relationship with contractor personnel
through supervisory or administrative practices.

Offer the contractor advice that may adversely affect contract
performance, compromise the rights of BPA, provide the basis for a
constructive change or impact any pending or future CO determination as
to fault or negligence.

Permit the contractor to proceed with work outside the scope of the
contract.

Grant extension of time.

Divulge any sensitive or proprietary information. (Contact the CO for
advice)

Accept an appointment as a COTR if there is an apparent conflict of
interest.

Exceed your authority as expressed (and limited) in your letter of
appointment.

Become involved in contractor\'s business affairs not covered in the
contract. This includes disputes with subcontractors, interpersonal
conflict among contractor\'s employees, etc.

### Exhibit 1 Sample COTR Delegation Memorandum

Date

(Organization, Routing)

Designation of Contracting Officer\'s Technical Representative

(Contract Number, Contractor Name)

Roger Kabat, Contracting Officer\'s Technical Representative

(Organization, Routing)

You are hereby designated the Contracting Officer\'s Technical
Representative (COTR) for the subject contract. You represent the
Contracting Officer in all technical matters that arise. Your major
duties and responsibilities are contained in the \"Contracting
Officer\'s Technical Representatives\' Guide for Services Contracts.\"
(BPI Appendix 14-A).

Your delegation is made without power of redelegation. The delegation
shall remain in effect through the life of the contract unless it is
revoked by the Contracting Officer, you are reassigned, or your
employment is terminated. Therefore, it is important that you advise me
immediately if someone else will assume your COTR responsibilities for
this contract.

You are authorized to perform the following functions:

\- Inspect and review work performed

\- Inspect or witness test presentations or other activities

\- Interpret technical specifications

\- Approve submitted deliverables/reports

\- Approve invoices

\- Reject non-conforming services, materials, or equipment.

\- Maintain a file of all contractor property purchasing and disposition
documents

-   Conduct required verifications of property listings (including
    annual physical verification of

property).

You are not authorized to act for the Contracting Officer in the
following matters pertaining to the contract:

\- Approve contract modifications or change orders

-   Authorize actions that result in a change in the contract price,
    technical specifications, or

> time of performance

\- Approve subcontractors

-   Except for unsafe practices or conditions, suspend or terminate

-   the Contractor\'s right to proceed

\- Take action to terminate the contract for default or for BPA
convenience

\- Make final decisions on any matters subject to appeal.

It is essential that the Contracting Officer be informed of the
Contractor\'s progress. I have enclosed a master contract status report
form tailored to your contract. Please make additional copies for your
future use. Prepare and submit a status report upon receipt of
deliverables or reports or upon completion of major contract performance
milestones. Also, submit a status report upon receipt of invoices,
attaching a copy of the invoice, for work performed.

Upon your recommendation, I have designated Angela Sanchez to act on
your behalf during your absence on all technical matters relating to the
contract. I ask that you familiarize her with your duties and
responsibilities.

Joel Bovard is the Contracting Officer\'s Representative (COR) I have
assigned to monitor this contract. Please contact him on all matters
pertaining to administration of this contract. His telephone number is
(503) 555-0990.

Cynthia Jenner, Contracting Officer

Enclosure: Status report

IMSecretary:ims:0000 (VS10-XXX-0000g)

cc:

Contractor

Contracting Officer\'s Representative

Disbursement Operations

Alternate COTR

Official File - XXX

### Exhibit 2 Sample Field Inspector Delegation Memorandum

Date

(Organization, Routing)

Designation of Field Inspector

(Contract Number, Contractor Name)

Jamie Jones, Field Inspector

(Organization, Routing)

You are hereby designated a Field Inspector for the subject contract.
You shall represent the Contracting Officer\'s Technical Representative
in technical matters. Your major duties and responsibilities are
outlined in the contract clause, Contracting Officer\'s Representatives.

This delegation is made without power of redelegation and shall remain
in effect through the life of the contract unless revoked by the
Contracting Officer\'s Technical Representative, you are reassigned, or
your employment is terminated.

You are authorized to perform the following functions:

\- Inspect and review work performed.

\- Advise contractor when it is not conforming to the contract
requirements.

\- Interpret technical specifications.

\- Recommend to the CO approval or rejection of submitted services.

\- Review invoices.

You are not authorized to act for the Contracting Officer\'s Technical
Representative in the following matters pertaining to the contract:

\- Reject services.

-   Authorize actions that result in a change in the contract price,
    technical specifications, or

time of performance.

-   Except for unsafe practices or conditions, suspend or terminate

-   the contractor\'s right to proceed.

\- Take action to terminate the contract for default or BPA convenience.

\- Sign invoices for acceptance.

Contractor noncompliance with any portion of the contract and all
contract changes are the specific responsibility of the Contracting
Officer and the Contracting Officer\'s Technical Representative. You
need to notify me of any and all instances of noncompliance with the
contract.

I have designated Rosy Schachtelovich to act on your behalf during your
absence on all technical matters relating to the contract. I ask that
you familiarize her with your duties and responsibilities.

Please do not hesitate to contact me if you have any questions.

Roger Kabat, Contracting Officer\'s Technical Representative

IMSecretary:ims:0000 (VS10-XXX-0000g)

cc: Contracting Officer, Contractor, Alternate Field Inspector, Official
File - XXX

### Exhibit 3 Contracting Authority and Communication Channels

### Exhibit 4 Typical Contents of COTR\'s Contract Administration File

A uniform and orderly approach to file maintenance will reduce time
spent searching for material and provide neat, standardized files.
Consistency is important. It is recommended that the COTR establish a
contract administration file identical to that used by the CO or COR.
The following is a sample format, to be adapted as necessary for the
type of contract:

\(a\) Folders: Suggest use or multi-part folders, such as, four-part or
six-part folders.

\(b\) Folder labels: The following information typically should be used
to identify file folders:

Contractor Name  

Project:  

Contract No.:    

\(c\) Placement of Folders in Filing Cabinet: Folders should be filed by
contractor name

Contents: This is a suggested file format, which may be modified as
necessary for the contract type (service, supply or construction).

Flap 1 Contract and Supplements

Purchase requests

Copy of executed original contract and all modifications

Flap 2 Basic File

Bonds and insurance certificate(s)

Performance and payment bonds

Insurance certificate(s)

Surety status inquiries

Contractor performance evaluation/award fee/quality assurance

Forms (travel, training, etc.)

Labor clearances and enforcement record(s)

Certified payroll

Contractor employee interview forms

Log of significant activities

Meeting notes

Overtime approvals and other work-progress related documents

Reports (accident, audit, contractor progress, COTR performance

status, financial, receiving, workforce status, etc.)

Schedule of compliance reviews

Project staffing/organization charts

List of BPA-furnished property

Close-out records

Final inspection memo

Final acceptance letter

Contract completion report

Release of claims

Contractor evaluation

Contract close-out checklist

Flap 3 Correspondence File

Copies of all correspondence between COTR and CO/COR

Copies of all correspondence between COTR and Field Inspectors

COTR and any Field Inspector designation

Internal memoranda

Record of communication between COTR and other support activities

Copies of all correspondence between COTR and contractor

Copies of all general correspondence related to contract

Copies of all correspondence regarding labor issues

Copies of all notices to proceed, stop or report submittals

Copies of all letters of approval pertaining to such matters as

materials, the contractor\'s quality control program, prospective

employees, and work schedules

Flap 4 Payment File

Backup documentation for contractor payment or progress payments

Copies of inspection reports related to payment

Copies of invoices

Information relative to discount provisions for prompt payment

Correspondence pertaining to payment

Payment status log

### Exhibit 5 COTR\'s Status Report 

![](media/image1.wmf){width="5.909027777777778in"
height="7.777777777777778in"}

### Exhibit 6 Correction Memorandum

![](media/image2.wmf){width="5.751574803149606in"
height="6.995669291338583in"}

### Exhibit 7 Sample Notice for Improper Invoice

SUBJECT: Notice of Improper Invoice

TO: (Contractor\'s Name & Address)

On [ ]{.underline} the attached invoice was received by Bonneville Power
Administration (BPA). Payment of this invoice cannot be made in
whole/part due to the reasons marked below:

( ) The attached invoice does not reflect our purchase
order/contract/task order/account number. This identification number is
necessary in order to make payment.

( ) There is an error in unit price/extension/total on the attached
invoice. Please provide a corrected invoice that agrees with the terms
of our purchase order/contract.

( ) The attached document is returned because payment cannot be made
against a statement/carbon copy. Please provide an original invoice so
that payment can be made.

( ) The attached invoice does not reflect unit price(s). Please provide
an itemized invoice so payment can be made.

( ) Other
(describe)\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_.

Please mail the requested information to the following address with a
copy of this notice attached.

Attn: (Name and Routing)  

Bonneville Power Administration

P.O. Box 3621

Portland, Oregon 97208

Your prompt attention to this matter is appreciated.

[ ]{.underline}

(Signature & Title)

Attachment: (Copy of Invoice)

cc: Accounts Payable

### Exhibit 8 Checklist for the Review of Cost-Reimbursement Contract Invoices

Contractor: [ ]{.underline} Contract Number: [ ]{.underline}

Invoice Number:   Date reviewed: [ ]{.underline}

Billing Period: [ ]{.underline} to [ ]{.underline}

[ ]{.underline} Does the invoice have all contractually required data?

[ ]{.underline} Is the period of performance covered by the billing
shown?

[ ]{.underline} Does the billing period duplicate a previously invoiced
period?

[ ]{.underline} Do billing rates agree with those in the contract?

[ ]{.underline} Is the rate of expenditure during the billing period as
expected, or is it unusually high or low?

[ ]{.underline} Is the number of hours billed a reasonable number for
the accomplishments of the contractor for that period of time?

[ ]{.underline} Are the travel expenses reasonable for the amount of
travel expected during the period of the billing.

[ ]{.underline} Are the total cumulative invoiced costs within the
contract\'s limitation?

[ ]{.underline} Are the equipment/supplies/materials invoiced as
expected, or has something caused an unusual expenditure?

[ ]{.underline} Is additional funding beyond the present ceiling
expected to be needed for this contract in the next three months?

[ ]{.underline} Are there direct costs not previously negotiated, such
as extra materials, unanticipated travel, personal computers, etc.?

[ ]{.underline} After considering the questions above, the technical
progress, and the financial information gained through the invoice
review described above, is there any reason to expect other than
satisfactory completion of the project/contract?

[ ]{.underline} Is there any reason to contact the Accounts Payable or
CO concerning timely processing of this invoice?

[ ]{.underline} Are receipts or supporting documentation attached?

[ ]{.underline} [ ]{.underline}

COTR Signature Date

### Exhibit 9 Invoice Control Sheet

### Exhibit 10 Definitions

\"CO\" means Contracting Officer.

\"COR\" means Contracting Officer\'s Representative.

\"COTR\" means Contracting Officer\'s Technical Representative.

\"Contract\" means a legal instrument reflecting a relationship between
BPA and another party where the principal purpose of the instrument is
the acquisition, by purchase, lease or barter, of property or services
for the direct benefit or use of BPA. In the context of this Guide, the
terms \"contract\" and \"contract administration\" also apply to
Intergovernmental Contracts.

\"Field inspector\" means one or more individuals that are delegated
authority to monitor the performance of the contractor.

\"General Scope of the Contract\" means the work which was fairly and
reasonably within the contemplation of the parties when they entered
into the contract. This can be defined by determining what each party
planned to do as a result of the contract. Generally, changes to
specific elements or parts of the work would be considered \"within the
scope\" if the end product of the contract was essentially the same as
that contracted for initially. Changes that are beyond the scope of the
contract are considered new purchases which require the competition
requirements of the BPI to be met.

\"Program Office\" means the office that is the source of funds for the
contract. This office determines major program goals and policies, and
allocates funds, personnel, and other resources among the programs for
which it is responsible, and determines other major facets of the
contract effort.

\"Requisitioner\" means the person in the program office who is
responsible for developing the project supported by a specific award,
and the person who concurs with any proposed program-type modifications
to agreements before action by the CO. The requisitioner recommends to
the CO an individual to serve as COTR for the contract. The nominated
individual must be certified by the HCA as a qualified COTR. The
important considerations are the technical and contract administration
knowledge of the individual to ensure effective technical compliance by
the contractor and receipt and acceptance of the supplies/services. The
CO will evaluate the recommendation(s), and designate the individual
selected as a COTR. If the qualifications of the individual(s) nominated
to be COTR are not met, the CO will ask for additional recommendations.
The requisitioner may be designated as the COTR on a contract, but this
is not necessary or required.