Contracting Officer's Representative Refresher Training\
Building On The Basics -- Course 1500-14SS

**\
A Telecast Originating**

**from the**

**BLM National Training Center in Phoenix, Arizona**

**February 2, 2005**

This transcript is from the closed-captioning file produced during the
telecast.

It may contain errors and omissions in transcription.

Announcer: Welcome to \"Building on the Basics, Contracting Officer\'s
Representative Refresher Training, Providing Tools to Successful
Contract Performance,\" Brought to you live from the BLM National
Training Center in Phoenix, Arizona. And now the host of your program,
Denise Bickler.\
\
D. Bickler: Good morning, everyone, and welcome to our satellite
presentation of Contracting Officer\'s Representative, or COR, Refresher
Training. As you heard, my name is Denise Bickler, and I am a
contracting officer in the construction and architect/engineer branch at
the BLM National Business Center. We look forward to working with you
over the next two days. As required by the Department of Interior, CORs
are to receive 24 hours of initial training and 8 hours of refresher
training every three years. Well, this is the year for your refresher
training, so for the next two days we\'ll be building on the basics by
reviewing and discussing with you the various elements involved in the
processes for acquisition of supplies, services and construction. We
have a number of DOI agencies participating this week from across the
nation. We\'d like to thank you all for joining us.

If you have taken this course via satellite before, we will be running
it pretty much in the same format. At the end of these two days, you\'ll
need to complete the test located in the course management tool. You
should have already downloaded and printed your study guide and taken
the pretest at the same website. After you have successfully completed
the test, with a minimum score of 70%, you\'ll be recertified as a COR
and receive your certificate. Please remember to send a copy of your
certificate to the person in your office responsible for maintaining the
list of certified CORs. In BLM, this is usually the state procurement
analyst. Joining me today to share their knowledge and expertise are two
other contracting officers from the BLM National Business Center. John
Sherman currently works in the I.T. contracting branch in Denver doing
I.T. service and supply contracts and software application development.
John handles several contracts for I.T. hardware that are used
throughout the Department. John has lots of experience in service
contracting outside of the I.T. arena as well. Good morning, John. It\'s
great to have you here.\
\
D. Bickler: Our other instructor is Lou Maestas, a Contracting Officer
in the services and supply branch at the BLM NBC. Before coming to the
NBC, Lou worked for many years in the Wyoming state office. So he brings
with him plenty of field level experience. Welcome, Lou.\
\
D. Bickler: Thanks again to both of you for being here. During the next
two days a lot of information will be discussed including some helpful
hints, personal anecdotes and war stories, and you\'ll be asked to do a
few exercises during the broadcast. By the end of this course, you will
be able to define your roles and responsibilities in contract
administration and use the tools outlined in this course to continue
building on the basics through updates where things have changed in
recent years. Based upon your survey responses and evaluations from the
last refresher training, we have made every effort to incorporate your
comments and suggestions into this training. With that in mind, we
invite and encourage your participation during this course. We hope that
you will be applying information from this course to accomplish your
everyday work assignments.

We want you to know that your participation is very important to the
success of this satellite course. To help you communicate in real time,
we\'ll be using our push-to-talk system so that you can interact with us
directly. We encourage you to use those push-to-talk microphones when
you have a question or something to share with us and the other viewers.
Whenever you use push to talk, we ask that you begin by stating your
name and location. We\'ll acknowledge your call and then you can proceed
with your question or comment. That helps us avoid confusion when more
than one person is calling in. There may be times during the training
that we would prefer that you hold your questions for the moment and
we\'ll request that you not use the PTT. During these times, you\'ll see
a red light in the corner of your screen. When it\'s open, you\'ll see
green light. We\'ll let you know that as we move along. We do plan to
keep the PTT option open most of the time because we want to hear from
you and we want to answer any question that may come up. Since we have
over 600 students today, a totally open PTT format may not work. So we
may instead call on your office or your state to responsibility to a
question. We\'ll play it by ear.

If you do not have the phone number and numeric pass code for the
push-to-talk telephone bridge for your agency, please call our operator
at 602-906-5500 to get that information. If you don\'t have a
push-to-talk system at your viewing site, we still want to hear from
you. We encourage you to participate by telephone or by fax. You can
call us toll-free at 1-877-709-5346. Sites in the greater Phoenix area
should call 602-943-2279. You can send us a fax at any time at
602-906-5701. You should already have taken your pretest and downloaded
your study guide. Keep your study guide handy because we\'ll be
referring to it throughout this broadcast. It will assist you in
completing your test. In addition, it should provide you with a good
reference tool in performing your duties as a COR. During the next two
days we\'re going to cover your roles and responsibilities and standards
of conduct within the acquisition phases of planning, solicitation,
award and administration. There will be two 15-minute breaks during each
day\'s broadcast to stretch your legs and clear your mind. I think
that\'s about it for the housekeeping items. Lou, do you want to get
things started?

J. Sherman: Good morning. Denise. I have been looking forward to this.\
\
L. Maestas: Thanks, Denise. Hello, everybody out there. It\'s good to be
with you today.\
\
L. Maestas: Thank you, Denise. Again, welcome to our training. This
training is going to go on for a couple days as Denise said, and we
realize there are experienced people out there as well as not so
experienced people out there, so bear with us. By taking this training
you are taking additional steps to ensure a well balanced approached to
staying prepared to perform your duties as a COR and strengthen your
basic foundation. In other words this, training will help strengthen and
reinforce your already established skills to continue building on the
basics. First of all, we recognize that you are already a COR and that
you probably have had plenty of training before. With that in mind we
also realize there will be the various levels of experience. So what is
your role as a COR during the complete acquisition process? Upon award,
a contract a contract, the COR appointment letter specifies the
Contracting Officer that you represent on that specific project but your
role as a procurement official begins way, way before this appointment
letter is issued.

As we progress through this training we hope to make you fully aware or
simply refresh your thought process of your very extremely important
role and responsibilities during the acquisition process from start to
finish. On page 4 of your study guide, you can see a very simple
definition of a COR as well as that of the P.I. Now, this is COR
refresher training and we may not make reference to the P.I. all that
often about this training, trust me, we know the value of you, the P.I.
and sometimes you actually fill that roam as a P.I. So we understand
your importance. Often the contracting process requires a multitude of
shared responsibilities between the Contracting Officer and the COR, as
well as other individuals, and it\'s this teamwork between you and me,
the COR and the Contracting Officer, that makes this whole process
really work. We\'ve structured this training to systematically follow
the general or normal standard acquisition process that basically
includes various steps and phases and, of course, a multitude of
actions.

We\'ll do our best to focus solely on your areas of responsibility so
you\'ll know exactly where you fit in throughout the acquisition
process. Please understand that whether you\'re with the BLM or in
another bureau within the DOI, each office will probably vary in their
procedures, but basically they\'ll be the same. As BLM instructors,
we\'ll simply try to provide you with basic information so please all
consult your local contracting office or better yet, check in with your
Contracting Officer. Regardless of what type of contract you administer,
please remember that you as a COR will be very extremely important, and
without you the Contracting Officer would not be able to effectively
accomplish his or her job. This partnership between the COR and the
Contracting Officer is essential in establishing and achieving contract
objectives because without a doubt it will be the Contracting Officer
and you the COR, who will ultimately ensure the successful
accomplishment of all contracting projects.

Now let\'s briefly talk a little about good and open communication. It
doesn\'t matter where or what your job is. It just simply always makes
good sense to ensure and establish good communication habits. I\'m sure
that you are fully aware of that in the contracting arena. This is
imperative in contracting. I think you can realize that at this point.
The very important team effort between you and me, the COR and the
Contracting Officer, starts and ends with solid communication, and
without it, there would be no telling what kind of results we would
achieve. Both the Contracting Officer\'s representative and the
Contracting Officers are often required to make very hard decisions, and
by maintaining this good communication throughout the whole contracting
process, I\'m sure that together we\'ll be able to exercise good
judgment to make good, sound business decisions. It\'s always \-- this
will always ensure that the integrity of the contract in process is
always maintained, something we always got to be aware of. We hope this
training will give you some tools and some new ideas to help making
these judgments easier.

Now, we all know that CORs are officially appointed upon award of the
contract to perform contract administration and surveillance of the
contract work. Your appointment letter defines your role and lists
specific duties, tasks and certain responsibilities. But also included
are limitations, and later in the training we will be taking a look at a
sample appointment letter. There are many other tasks and
responsibilities the COR may get involved with prior to award and, of
course, prior to your official delegation or designation. Let\'s take a
look on page 5 of your study guide, and there we will see a list of many
of these roles and responsibilities that the COR is generally involved
with. That list, of course, is not all inclusive and you probably know
of others, but nevertheless, let\'s talk about a few of these. First,
there\'s writing and developing specifications, or statements of work.
Well, you as a COR, I know many of you have written many of them, and if
you haven\'t written them, you ever probably assisted program offices in
doing this.

Next, how about conducting market research? It seems like more and more
market research is being required for all of our acquisitions these
days, and again it\'s probably you the COR working with the Contracting
Officer, no doubt to help out on this kind of stuff. There\'s also
conducting pre-work meetings. I know that \-- I don\'t know of any
written policy that says that the COR will conduct a pre-work, but at
least in the BLM we know that you are constantly called upon to perform
the pre-work conference or for that matter there may be so many other
meetings that surface and it may be necessary for you to fill that role
as well. Even though we\'re just getting started, I\'m certain you can
see that your role and position as a COR is incredibly important to the
contracting process. Without you, it would be extremely difficult to
successfully accomplish any contracting process. In the next module,
Denise will be talking about standards and conducts and ethics. We'll
also be talking a little about unauthorized actions as well as
ratification. But for now, and a result of so many years of lessons
learned from contracting officials in the past, it\'s very important
that we briefly identify some limitations that are placed on the COR.

We listed many things that you do, but it\'s also important to remember
to list those certain situations that you as a COR should always and
definitely try to avoid. We\'re now \-- not going to get into them right
now but also on page 5 you can see this list of several situations that
you as a COR need to be fully aware of and always avoid. Although not
all inclusive again, this list is good to review and it\'s always a good
idea to share these same thoughts with others who may sometimes need
reminding. These are actions that only a contract \-- warranted
Contracting Officer can do if ever you are unclear of the expectations
and limitations of a COR, your authority, contact your local Contracting
Officer. Now, to make sure you\'re paying attention, let\'s do a few
exercises and hopefully this will get you warmed up for what\'s to come
in the future. Please go to page 6 of your study guide and look at some
questions we\'ve listed there. What I\'ll do is I\'ll read each question
and ask you to answer using your push-to-talk. Now, whether you\'re
experienced or not, go ahead and take a stab at them, see if you can
answer these questions. I\'ll read the first one. Although the
contracting or acquisition team may be comprised of a variety of
individuals, who are the most important members? Who can answer that for
me?\
\
Caller: Barstow.\
\
Who is this again?\
\
Caller: H.T. from Barstow, California.\
\
L. Maestas: Barstow, go ahead.\
\
Caller: I\'m going to go with C., the Contracting Officer and the COR.\
\
L. Maestas: I can see you\'re going to get an A this whole training
because that is correct. Thanks. How about number 2, all of the COR\'s
responsibilities are identified \-- defined by the Contracting Officer
in the COR appointment letter. Is that true or false? Somebody come to
me on that.\
\
Caller: Doug, Carlsbad, New Mexico. I say it\'s false.\
\
L. Maestas: Doug from card bad, that\'s absolutely correct. We can
specify our duties in writing, that\'s easier \-- very easy but it\'s
easier said than done to try to identify everything that you the COR
does on any contracting project and way before the project starts, as we
said, and you\'ll see more of that as we get into the planning phase of
this. Let\'s take a look at question number 3 now. A COR is required to
always exercise sound judgment, but when he isn\'t sure of his
limitations or procedures, from who should the COR seek advice?\
\
Caller: This is Jerry at Winnemucca. C. is the correct answer.\
\
L. Maestas: C. is correct. Whenever in doubt, we probably would say this
time and again and I know many of my CORs I have worked with over the
years have heard me say this, check with your Contracting Officer, check
with me, together we\'ll solve the problem no doubt and hopefully keep
people out of trouble. That\'s why I always make reference to that
statement. Number 4: when does the COR\'s involvement start?\
\
Caller: H.T. from Barstow. I\'m going to say D., the project planning
phase.\
\
L. Maestas: That\'s absolutely correct. I just said that your roles
start way, way back. Thanks a lot, folks. That was great response and
all the answers were correct, and, Denise, I\'m turning this over to you
now.\
\
D. Bickler: Thanks, Lou. As Lou said I\'m going to talk about
procurement integrity and authorized commitments. This is a cumbersome
topic and some of you may have already taken annual ethics training,
however, we feel it\'s important to at least highlight it for you in
this training, specifically as it relates to acquisition and your job as
a COR. The primary objective of this module is to reinforce your
awareness regarding government standards of conduct and the importance
of maintaining unquestionable ethics. In addition, you\'ll understand
what an authorized commitment is and who has authority to ratify them.
We\'re now on page 7 of the study guide. Transactions relating to the
expenditure of public funds require the highest degree of public trust
and an impeccable standard of conduct by everyone involved. The office
of federal procurement policy act specifically prohibits certain conduct
on the part of both government procurement officials and contractor
personnel.

Now, as a COR, you are considered a procurement official, and,
therefore, you have a huge responsibility to always exercise fairness in
order to preserve the integrity during all phases of the procurement
process. Although agency regulations may allow for acceptance of some
gratuities, as procurement officials, you and I are held to a higher
standard and the rules are more stringent. Within every contract, there
is a clause called gratuities, which states that no government employee
may solicit or accept either directly or indirectly anything of monetary
value from anyone seeking government business or anyone actively
performing work under a government contract. The general rule is to
strictly avoid any conflict of interest or even the appearance of a
conflict in a government contractor relationship. Some rules you want to
remember are that there are prohibitions against accepting gratuities,
as I stated in the gratuities clause. You\'re also required to report
violations of the FAR gratuities clause to the Contracting Officer.\
\
L. Maestas: You know, Denise, if I may interject for a moment mere, but
that gratuities clause is always \-- it\'s there for our benefit, all
the government people, as well, but it\'s primarily there to remind the
contractor that, hey, don\'t be tempting these government employees.\
\
D. Bickler: That\'s right. The contractor is also obliged to comply with
that clause. Now, you\'re also prohibited from obtaining procurement
information prior to award. With that we\'re talking about information
that may be floating around under requests for proposals, and, John, you
do more of that probably than I do. Would you just briefly talk about
what that pertains to?\
\
J. Sherman: One example, Denise, would be if you are working on an
evaluation committee and you\'re doing the technical review or scoring.
What we don\'t want to provide at that point is the cost data so that we
could have a fair unbiased technical evaluation. So there are specific
instances where you may be withheld from certain procurement
information.\
\
D. Bickler: Thanks, John. Next, you\'re prohibited from disclosing
procurement information. What we\'re talking about there is on requests
for quotations and again requests for proposals, the FAR is very
explicit but what information can be released, when it can be released
and how it is to be released. So we have to be careful there. You are
also required to report any contact by an offeror regarding post federal
employment. You are prohibited as a former official from accepting
compensation from a contractor within one year after serving as a
procurement official. And there\'s a prohibition on contract award to a
government employee or to a business owned or substantially owned by one
or more government employees. Now, John, I believe \-- yes, someone is
calling in? Or maybe not. John, I think you have a story about a
Contracting Officer gone bad.\
\
J. Sherman: Yes, I do, Denise. This one pretty much floored me and
probably a number of other people. As you know, Denise, remember the
restriction on post employment. You may not seek employment with a firm
that you are actively working with as a procurement official, and, yes,
you as CORs and project inspectors are considered procurement officials
and you may not be hired by a firm to work on a project where you were
in that procurement official duty on the government side for at least
one year. I\'ve got an article here that, like I said, this case really
floored me. It\'s not you or me in our positions, but in this case it
was Darlene Druyan. She was the Chief Executive Officer with the United
States Air Force, and after a stellar career negotiating multi-million,
probably even billion-dollar contracts with Boeing and McDonnell
Douglas, firms like that, she decided to negotiate a quarter million
dollar salaried position with Boeing while she was a federal employee
working for the Air Force and working on those same contracts. She even
stated and admitted during her trial, she\'s actually in jail right now,
as we speak, that she had favored Boeing in at least four separate
contract negotiations. She also got her daughter and son-in-law a job
within the Boeing company. So, you know, it\'s just to say, you\'ve got
to be \--\
\
D. Bickler: Now, she is very, very high level procurement official. Did
you say she is in jail now?\
\
J. Sherman: She\'s in jail as we speak.\
\
D. Bickler: Along with the CEO of Boeing?\
\
J. Sherman: The chief financial officer was also fired.\
\
D. Bickler: We realize Dryian\'s is a high level official but it all
works for you as well because you are considered a procurement official.
That\'s, I would say the worst case scenario but keep in mind all that
information that we just went through,especially gratuities, and I want
to take just a minute here to say that we have the Park Service finally
online, and welcome back. We can\'t test your push-to-talk right now. If
you give us just a minute, we will be at a few more questions and we\'ll
giver you the opportunity to see if your push-to-talk is working at that
time. But \-- I want to reference again the red light/green light in the
corner screen here. When it\'s green you can use your push-to-talk when
it\'s red, we would prefer if you not use your push-to-talk. We\'ll try
to keep it open as often as we can throughout the day. Now getting back
to this, the subject of standards of conduct has great impact on the
contract administration team because of our unique responsibility under
a contract. As the COR, you have continuous contact with the contractor
in the field. You may staying at the same motel, eating at the same
restaurants or even camping at the same campgrounds. In some cases, the
contractor may be your neighbor. It\'s imperative that you maintain an
arm\'s length relationship with the contractor. Violations of this
provision are a very serious matter as you heard us talk about in the
Druyan story. It can result in contract termination, debarment or
criminal conviction for the contractor and discipline or termination for
the government employee. Each of us must exercise extreme caution in any
relationship or activity with a contractor. The regulations apply not
only to actual conflicts of interest but also to the appearance of a
conflict. If a situation doesn\'t feel right, it probably isn\'t. Be
cautious. Any suspected violations gratuity clause or ethics prohibition
must be reported to the Contracting Officer or other designated official
in accordance with agency procedures. You should be on page 8 of the
guide now and we\'re going to give you five minutes to read the four
scenarios and come up with some answers. When we come back we\'ll want
you to share your answers with us.\
\
D. Bickler: Okay. Based on those scenarios we\'re going to ask you to
answer those questions and what I\'m going to do is ask the Yosemite
national park if they could answer the first question and we can see if
your push-to-talk is working. Anyone in Yosemite? How about sequoia and
kings canyon? How about \-- caught this Yosemite.\
\
D. Bickler: Okay.\
\
Caller: Does this work for sequoia kings?\
\
D. Bickler: Yosemite, would you like to take a stab at answering the
first question, should the COR and P.I. attend the contractor\'s
picnic?\
\
Caller: I answered no.\
\
You would be correct. That would not be appropriate as a COR or a PI or
your families to attend a contractor\'s picnic while they\'re working
for the government. Would that violate, I believe, the gratuities
clause. Thank you very much. It sounds like the Park Service\'s
push-to-talk is up and running.\
\
Caller: NCR is here with you. Sorry for not checking in.\
\
D. Bickler: That\'s all right. Welcome. Based on scenario number 2,
should you continue to serve as COR if your spouse owns the company?
Anybody?\
\
Caller: I would like to answer that, Barstow. Based on appearance, I
would say no as a COR but yes as one \--\
\
D. Bickler: We\'ll take the first one first, and your answer was no you
should not continue being the COR, and that would be the correct answer.
That would be a conflict of interest for you to be the Contracting
Officer\'s rep on a contract where your wife is the owner of the
company. Now, for number 2, you said that the answer was yes, we could
have awarded the contract to Bellhorn. Is there anybody out there with a
different answer?\
\
Caller: Dave in El Centro, California. I say no.\
\
D. Bickler: Okay. Barstow, why did you say, yes, we could award that
contract?\
\
Caller: Well, reason \-- I was thinking you could award it because we
have no control who gets the appointment or bids the contract. So why
should we hold out the contract to him if just because we\'re COR? My
wife is the president of the company.\
\
D. Bickler: Okay. Dave in he will Sentry, why do you say, no, they
shouldn\'t have been awarded the contract?\
\
Caller: Because there\'s the possibility and the appearance of people
\-- of you giving your wife information that other contractors didn\'t
have to give her an unfair advantage.\
\
D. Bickler: Okay. The answer to that \-- those are both very good
answers, and you\'re both actually \-- could be right. It depends on the
situation. Remember that the prohibition says that we can\'t award a
contract to a government employee or to a company owned in part or in
whole by a government employee. So do you as a COR have any ownership in
that company? If the answer is yes, then, no, we cannot award a
contract. If you have no ownership in your wife\'s company, then we can
award a contract to your wife\'s company, however, you as the COR must
have refused yourself or removed yourself from the entire procurement
process as early as you found out that your wife\'s company was
interested in the project, because then you would have avoided the
appearance of that conflict of interest. So you were both right,
actually. Let\'s look at the third scenario. Should you accept the hat?\
\
Caller: This is Jerry in Winnemucca, according to the ethics rules you
could, but as the COR I would prefer not to.\
\
D. Bickler: Well, according to your local agency policy, you probably
could receive that hat because it\'s under \$10. However, as a
procurement official, under the gratuities clause you shouldn\'t because
you\'re not to receive anything of monetary value. There was a situation
that occurred in one of our field offices where the local tractor
company sent out as a matter of public relations \-- mailed out hats and
calendars to all of their \-- all of the people that do business with
them. So in this BLM office, it\'s a calendar hanging on the wall of
this particular tractor company. Well, in one day walks a competitor who
sees the calendar, asks for a supervisor, and wants to know why the BLM
is advertising his competitor\'s calendar. So there\'s a problem there,
and, of course, the calendar had to be removed. If you are not acting as
a COR, you could accept the hat and what we recommend is you take it
home and wear it on your personal time, not at work. If you are a COR,
should not accept the hat. It violates the gratuities clause, because
the gratuities clause left no room for question. You should receive
nothing of monetary value. Thank you very much, Jerry. The fourth
scenario, should you allow the contractor to pay for your meal? Anybody
in.\
\
Caller: Lake Havasu.\
\
D. Bickler: Hi, Lake Havasu.\
\
Caller: The answer is no.\
\
D. Bickler: And you\'d be correct, and whoever else chimed in said no,
and you, too, would be correct. Again, it goes to the gratuities clause.
We have heard of situations where if you\'re out in the field working,
again you and your contractor, it\'s a small town, you\'re eating at the
small restaurant, the contractor without your knowledge pay for your
meal. What might you do there? Anybody have a suggestion?\
\
Caller: Pay them back.\
\
Caller: Yosemite \-- you might repay the contractor for the meal.\
\
D. Bickler: That\'s one suggestion s repay the contractor, pay him back
when you get back to the job site. Other suggestions have been leave the
waitress a very large tip in the amount of your bill. Or it\'s been said
that you could on the next lunch pay for the contractor\'s meal and then
you\'re even. But the \-- probably the best one, I don\'t know what you
guys think, would be to reimburse the contractor, pay him back and
explain that would be a violation of the gratuities clause.\
\
J. Sherman: That would be best.\
\
D. Bickler: John has an example of the appearance of a conflict of
interest he would like to share with us.\
\
J. Sherman: Yeah, it just happens last week on a procurement that I\'m
working on right now. One of the folks that was actually helped writing
the specifications sent me an e-mail and said, John, I\'ve been invited
after hours, we have a trip back east next week to finalize our
specifications, but one of the vendors, potential offerors asked if he,
this individual, could come and have a tour of their facility after
hours, and I trust the individual, and I trust all of you folks, too,
but again, it could give the appearance, they know that he\'s part of
the specification committee, he\'s actually writing the requirements for
this upcoming procurement, and just for him to go over to the vendor\'s
facility after hours, if another vendor or potential offeror saw that
they could probably say, hey, there might be an unfair competitive
advantage. So it\'s tough. We do come across these. We\'re going to
probably come across these more often in the future. Lou\'s going to
talk about later on the trend of more contracting out, specifically in
regards to services, something that we\'ve seen. So you\'re going to run
across this. Any questions, just like this individual came to me,
contact your C.O. We\'ll discuss it and see what makes the most sense.\
\
L. Maestas: Denise, I want to relate a little story also, and it goes
back to the hat question. That\'s something to think about here. This
has happened on more than one occasion, but I\'ve been out there and
I\'ve seen my CORs and, you know, they\'ve had like about 10 hats lined
occupy their shelf. They\'re showing \-- they\'re not partial at all,
but it\'s something to think about there, and we don\'t like to show
those logos because somebody might complain.\
\
D. Bickler: It can appear to be favoritism or just a bad appearance. So
as I said, we know this is a cumbersome topic, but let\'s move on. Thank
you for your great responses, too. We will have more exercises as we go
along, so everyone from east to west coast will have an opportunity to
talk to us. Now, on page 8 of your study guide, there are some FAR
references you can look at your leisure. If you ever have any questions
or concerns, as John said, you could contact your Contracting Officer or
you can contact your local ethics officer. Throughout the next two days,
we will reiterate how the topic of procurement integrity and ethics
affects you during the acquisition process. But for right now, let\'s
briefly discuss unauthorized commitments with Lou.\
\
L. Maestas: Thank you, Denise. No matter how often we get drilled with
ethics training and just general communication regarding these
situations, these things still happen on and on and on. But anyway, on
page 9 of your study guide, we have another subject that needs to be
discussed. You must always guard against getting into situations where
unauthorized actions may result. No one is authorized to obligate the
government to a contract, to make changes that affect the price, the
quality, the quantity, delivery or other existing contract terms and
conditions except, you got it, a warranted Contracting Officer. When an
unauthorized commitment occurs, ratification is the only way to make the
procurement legal. Hopefully to pay the contractor or the vendor. Your
supervisor as well as other higher level managers will probably get
involved, somebody like the BLM state director, for example. They will
generally get notified, and they\'re going to be involved in the
ratification process. They\'re not very nice situations.

The solicitation \-- the solicitor will also probably be reviewing this
action as well. You may be held personally liable for reimbursement of
any funds. Contracting officers do not, and I say again, do not
generally have the authority to ratify unauthorized commitments. This
authority is generally reserved for the head of the contracting
activity, or it\'s generally somebody at a level higher than the
Contracting Officer. This authority may be redelegated in your agency to
a lower level. For example, in the BLM, this authority has been
delegated to the chief of the contracting office, who is usually the
procurement analyst for actions up to the simplified acquisition
threshold, which is \$100,000.\
\
D. Bickler: Thank you, Lou. We recognize that you as the COR may be
particularly vulnerable to making unauthorized commitments as you\'re
working out on the job site or ethics violations because you work very
closely with the contractors. Remembers, ethics violations and
ratifications can waste valuable time and serious consequences can
result. Now in the next module we\'re going to start getting into the
planning process and developing your requirement. It\'s rather detailed,
so follow along closely in your study guide, and if you have any
questions, ask them at any time. Let\'s get right into it and we\'re
going to let John teach this segment because he has a lot of information
to share.\
\
J. Sherman: Thank you, Denise. I would just like to say so far just, you
know, want to say how well these students are coming in and giving us
feedback as well as all the correct answers. You guys are great. Please
use the push-to-talk, send in your faxes, or call in your questions as
we go through this portion of our training. At the end this module you
will know your role and responsibility in the planning phase of the
acquisition process and be able to describe various choices available in
developing your requirement. As a consumer, how often do you make a
major purchase like buying a car or a house without planning ahead? How
about you, Lou?\
\
L. Maestas: John, just like most everybody in the world here, we tend to
do that. Now, I know what you\'re going to tell us is plan our efforts
and if we do plan our efforts, I guarantee you we\'ll probably get a
good buy.\
\
J. Sherman: Very good. Most likely none of you do. You begin your
planning quite some time ahead, perhaps looking first at your budget.
The same is true in the government. As most of you know, a requirement
can take from a couple days to many years to develop and plan. Lack of
proper planning is probably the number one contributors to problems
within the acquisition process and the resultant award. Here\'s
something to think about. What are some of the benefits of planning? As
we go through these, fill in the answers on page 10 of your study guide.
I\'m going to go ahead and fill these in as we go through. We\'re now at
page 10 of the study guide.

The first one is the benefits of planning: timely awards to keep your
project on schedule. The second is: better defined requirements to
ensure you get what you need. The third: lower costs as a result of
increased competition in your procurement. The fourth is: adequate time
to address both field and contracting issues. And the last is: better
quality vendors. All right, the next area we\'re going to cover is the
consequences to lack of planning. This is what you probably guessed, to
what the benefits are pretty much. Untimely awards is the first one
causing delays in your project. The second is loss of project or
funding. Hopefully you haven\'t had to go through that before. The third
is an increased cost. The fourth is lower quality vendors. And the last,
fifth or last, is poor end results.

There was a study done a number of years back in our acquisition chief
had told me of it, and they looked at a number of projects that came in,
and they looked at the timing of when those projects came into the
procurement office, and they evaluated not only the cost but the quality
to the vendors based on when those purchase requests were submitted, and
what this study resulted in finding was that the earlier, obviously, you
got your project in, the better quality vendor you received and the
lower cost that project was. What happens is the longer you wait, these
vendors get their \-- get their projects lined up and you\'re going to
get poor quality vendors the later you get in those requirements just
because they have their jobs lined up, they\'re going to have to hire
additional people, and they\'re probably going to raise the price of
that project.\
\
D. Bickler: You know, I don\'t know if that\'s \-- if that\'s true in
all aspects of procurement or if it\'s just in construction. I don\'t
know \--\
\
J. Sherman: They\'re checking echo.\
\
D. Bickler: Anyway \--\
\
D. Bickler: These pros and cons, the consequences and benefits, are
really evident in construction where there\'s an actual construction
field season, where it\'s the best time to construct. I know there\'s
\-- it\'s a catch 22 for the CORs s out there because we don\'t get our
budgets until so late in the year sometimes and you have to hurry up and
get the package together and hurry up and get it into contracting. But
it really is true. If we don\'t get it until late in the summer, we
don\'t really have a nice draw of competition from good contractors
because they\'re already committed to other contracts, which means that
we\'re left with some contractors who are perhaps less than desirable to
work with, and \-- not all of them, mind you, we have a lot of good
contractors, but we just don\'t get the same competition as we do when
those projects come in early. But it is a catch 22, I think, for the
field, because we get our money late.\
\
J. Sherman: That\'s also what I\'ve heard, Denise, especially from the
project offices. They\'ve got their jobs lined up, they\'re waiting for
the passbacks or their budget. Just remember, try to get in your
projects early as best you can.\
\
L. Maestas: One thing that comes to mind right away, and I\'m sure just
about everybody has gone through this, let\'s think about end of fiscal
year. I know you CORs and technical office at contracting people as well
were trying to do our best to plan out procurements, but end of fiscal
year sometimes comes in and bites us, and we see a lot of results where
the procurements are not as good as they could be because we\'re rushing
and good old end of fiscal year hits us again.\
\
J. Sherman: Lou, that brings us into a planning tool that I\'ve always
advocated the use of, and that\'s called the advanced procurement plan.
I\'m not sure if the CORs out there and PIs are aware therefore tool but
it\'s a FAR requirement and it\'s also identified in our annual work
plan directives each year. It\'s also for the year of \-- for the use of
advance notice to small businesses. This advance procurement plan
consists of the annual acquisition requirements nor your project \-- for
your project offices. This data then is rolled up into a departmental
system, and at the BLM the COR or the project manager submits this APP
data through our new budget planning system. It\'s done annually, and
you could update it quarterly as your requirements change. What I\'d
like to go through now is an overhead just to show you the entry point
for submitting this APP data. I\'m hoping this shows up. You don\'t need
to read the words here specifically, but just to get you a general idea.

This is the budget planning system within the BLM, and what you do here
then is just go ahead to the start production here. You would have a
log-in and I.D., the password. Would that get you, then, to my next
overhead, which is even smaller print. I\'m hoping we can at least see
something here. I\'ll enlarge it a little bit for you. This is the
advance procurement plan. You get to select things like the budget year
so you can plan for out years. You put your project office. You would
assign it a plan number. You would give it a brief description, maybe
you\'re doing a cattle guard procurement or a fencing job. You would
mark it the original submission. If you are going to update it
throughout the year you could put change or revision. Maybe your project
is no longer required and you could go ahead and delete it. You put in
other codes like the product and service code. You would go through and
hopefully select the business size. Maybe you\'ve got a small business
lined up for this or small businesses. And here\'s an actual submittal
that we have on our system right now. You can see it\'s for Nevada, and
it\'s the office code 050, maybe Winnemucca or Ely or Battle Mountain or
I\'m not certain. The description is the old Spanish trail program
coordinator.

The next one is Alaska. Alaska fire service fuel yard secondary
containment. What this does as a planning tool, it allows both the
project offices throughout the bureau and the contracting staffs to look
ahead and say, okay, we\'ve got maybe a major procurement that we need
to look at and start doing our market research on, start working with
the CORs, and that\'s the goal as a planning document. The APP, like I
said, is maintained throughout the year and through all phases of the
budget cycle. Redundant data is eliminated, which mine Nieves \--
minimizes opportunities for error and we have the most up to date
information available for those who need it. The web address for the
budget planning system is BPS.BLM.gov and they\'ve got it configured for
the Netscape browser. The APP helps the CO help you. The CO can see what
you are planning and can begin acquisition strategies by having
discussions with you about your requirements, and we can begin to do the
market research together.

We may consolidate like requirements for quantity discounts using less
administrative time for certain large-dollar actions. This could be
contract bundling that has some additional requirements that have to be
made. Bundling may provide substantial benefits to the government.
However, because of potential impact on small business participation,
the head of the agency or designee must coordinate and conduct market
research to determine whether bundling is necessary and justified. I
would like to give an example of a project I had worked on with the
project office a few years ago, and we\'ve got one of the items up here.
It\'s an item of supply. It\'s a \-- watch out, Lou! It\'s a survey
monument. I\'ll put this down here. What we found, we looked at what the
BLM \-- we looked at what the BLM was buying re repetitively and in
higher numbers and one of the items was survey monuments, these are for
the cadastral program, and it signifies a longitude and latitude and
it\'s placed in the ground for public land designation. We found that
the states, the lower 48 states, within BLM were buying a couple hundred
a time, whereas Alaska, who still has a lot of unsurveyed land, bought
about 2,000 a year. They did one buy, they were getting them for about
\$28 apiece, whereas \-- I\'m sorry, they were getting them for \$18,
and the lower 48 were getting them for \$28. Well, working with folks
like Danny McDonald in our Colorado state office, Mike Wilson, who
helped on the specs in Alaska, we worked hand in hand with the program
folks, and we said, lower 48, we\'ll consolidate our orders, by them
once annually. I went ahead and competed and made multiple awards and
definite delivery and definite quantity contracts where we competed the
lower 48\'s requirements that came up to roughly the same number of
monuments as Alaska, and we got the dollars down to 18 for the lower 48,
about a 30% savings, so they could buy more monuments. So that\'s one of
the tools, the APP, that we could use to look at what makes sense to do,
that type of market research on.

Now, I realize we buy from A to Z, acetone to XYLOTONE. We may buy it
once a year to every five years. I don\'t suggest a procurement of this
nature or that much time in, but if you do buy something in large
quantities like fencing in Nevada or Wyoming we, buy hundreds of miles
of fencing, you as a project manager, COR, think about it, you know
better than the contracting staff what your requirements are. So\...\
\
Caller: This is Chip up stairs at NTC. Is there a dollar threshold that
exists? You said that these plans are requirement. What is the threshold
when one of these plans must be submitted?\
\
J. Sherman: That\'s an excellent question, Chip. I\'m glad you brought
that up. The requirements for the advanced procurement plan submittal
are \$25,000 and above. That\'s an internal BLM requirement. So we\'re
looking for you to submit an APP item for \$25,000 and above.\
\
Caller: Thanks.\
\
J. Sherman: You\'re welcome.\
\
Caller: This is Carlsbad. Could you just repeat that APP net address?\
\
J. Sherman: The URL? Certainly. We\'re entering the APP data now through
the budget planning system, and that web address or URL is BPS.BLM.gov.\
\
D. Bickler: Is that WWW, John?\
\
J. Sherman: No. The full URLL is HTTP://BPS.BLM.gov.\
\
Caller: You mentioned something, I thought with an APP.net address.\
\
J. Sherman: No, this is where you enter the data. You could view the
data from our external acquisition website and I could give you that.\
\
D. Bickler: We\'re going to get to that later, John.\
\
J. Sherman: Okay.\
\
D. Bickler: If you can hold on for just a little bit, we\'ll get to that
in a few minutes, that other website I think you\'re looking for.\
\
J. Sherman: What I have on the screen right now, if we could show that,
is the actual APP data as it shows up on the internet. I\'m going to
just move this across the screen. You\'ve got your North American
industrial classification system code, a brief description of the
action. Here we\'ve got \-- it\'s the Redlands fish screen, this is the
third one down. I\'m not sure if they entered the right dollar amount
because that\'s one heck of a price for a fish screen. They\'ve chosen
100 mill or more. So Jon about that one. You have an estimated dollar
range that shows up here that you select. The solicitation quarter
you\'re anticipating it be released. You\'ve got the solicitation year.
Then the quarter you\'re expecting award. The year of award, the
physical year. And then the preference program. What I found over the
years, and this is a shared responsibility, this training is for you the
COR, it benefits both you and us if you have small businesses that
you\'re aware of that you\'d like to maybe set the future procurement
aside. You don\'t want to wait until your purchase request comes to the
contracting office and we have \'slow the process down, go back and try
to find those small businesses. It\'s really, again, a responsibility of
both the project office, the COR, and the Contracting Officer to
identify those small businesses.\
\
L. Maestas: You know, John, the APP is there for the primary benefit of
the \-- well, the government, the CORs and the contracting people, but I
can guarantee you the minute \-- that many of you have received calls
from vendors who have access to this particular website, and they\'re
checking that out, and that\'s why it\'s so important that we do keep it
up to date. But this is a good tool to help in our marketing, as we\'ll
get into later.\
\
J. Sherman: That\'s correct, Lou, and if I go just over briefly here on
the APP submittal, you could see the bureau and then there you guys are,
there\'s the COR. This is where you\'re getting these calls, and it is
to increase the vendor participation. They\'ve got the name and the
phone number. Here\'s the name here, okay, we\'ve got the phone number,
and then we\'ve got the place of performance and the state. When these
vendors go in and look, which we\'ll show you a little later on, they
could query by state. They could query by NAICS code. So they could kind
of hone in on what projects that they\'re wanting to find out more
information about. Do we have any questions about the advance
procurement plan? I am hoping this is something everyone has been aware
of. If not, I hope you\'re aware of it now and you could start using it
in the future.\
\
Caller: This is Yosemite.\
\
J. Sherman: Go ahead.\
\
Caller: On that form, it gives dollar amounts, which previously it was
mentioned we shouldn\'t disclose dollar amounts to potential vendors.\
\
J. Sherman: That\'s a great question, but what we have here, and it\'s
like how construction works, I know when they put out a request for bid,
they\'ll give a range for that project. They won\'t give the government
estimate away. And then this form here will show you \-- it tells you a
range, and they\'re pretty broad ranges. Boy, these fish screens are
pretty expensive. Something \-- I don\'t know. Maybe they are. But
here\'s another one. 5 to 10 million. Great question from Yosemite but
they are given in ranges. We\'re not giving away the independent
government estimates. So I don\'t think there\'s a worry there. Good
question.\
\
Caller: Art in Phoenix.\
\
J. Sherman: Go ahead, Phoenix.\
\
My question is the NAICS code, where does that come from and how do you
determine that code related to your project?\
\
J. Sherman: Another good question. When you\'re in the budget and
planning system, and entering the APP field data, there\'s a pulldown
list that gives you a description of those NAICS classification codes.
There\'s also a website, you could search under Google, another search
engine, and that gives you a walk-through so you could select the
correct NAICS code.\
\
D. Bickler: And, John, NAICS stands for North American industrial
classification system.\
\
J. Sherman: A few years acing this code used to be called the standard
and industrial classification. , the SIC code.\
\
D. Bickler: If you need help with that, you can call your Contracting
Officer.\
\
J. Sherman: Certainly. We would be glad to help you out there. Good
questions. Okay. To assist you in determining whether your project could
be set aside, information is available through a link on the contractor
central registration. It\'s called the dynamic link \-- or dynamic small
business search, and the web address there is WWW.CCR.gov. This used to
be called pro net. That was run by the small business administration. So
if you don\'t know any local vendors that are small that you have for
this particular requirement, you can go to that website and research
that data and set it aside for your APP. If you find enough available
vendors. Or better yet, when you submit your purchase requests, submit
us a list of suggested vendors and we\'ll include them in our bidders
list. The APP is the departmental web-based database that is available
to contractors as well who could look for future contracting work on the
site. These web addresses are available in your study guide. I hope you
can see how this tool benefits the project office, the contracting
office, the contractor community for planning purposes.\
\
D. Bickler: John, I think we\'ve \-- we were a little late starting with
the testing, and we\'ve been going for about an hour and 15 minutes now
and we\'re going to give everybody their first 15-minute break. So go
stretch your legs, clear your mind.\
\
Caller: Thank you!\
\
D. Bickler: You\'re welcome. Time flies up here. I don\'t know if it
does out there. For first 15-minute break. We will see you in 15
minutes.\
\
D. Bickler: Welcome back. I hope you got a good stretch in there. We\'ll
go back to John. He will pick up where he left off. John?\
\
J. Sherman: Thanks, Denise. The next step we\'re going to go over is to
cover market research, and personally this is one of my favorite areas
in the procurement process. Denise, when you go to buy a new car, you
don\'t usually buy the first car you see on the first lot you pass, do
you?\
\
D. Bickler: I\'ve done that and it didn\'t work out very well. I don\'t
do it anymore.\
\
J. Sherman: Okay. You probably want to do in the future some further
research before you buy that first car off the first lot.\
\
L. Maestas: Does that apply to me as well, John?\
\
J. Sherman: I don\'t know. Do you do that, too, Lou? Also, when buying a
new car, for most of us we don\'t necessarily need to have it specially
built. We buy what is commercially available in the marketplace. We
should do the same thing when we are defining a new project here at
work. If you design add new car rather than buying it commercially I
would imagine the cost would be extremely higher. The same is true for
the government. We only want to buy \-- not only, but in most cases we
want to buy what is commercially available. I would imagine, based on
our requirements that I see in our procurement office, that about 90%
what we buy or procure is commercially available. The definition of
commercial item is something that is off the shelf, and here\'s the
definition on your screen now, is something that\'s off the shelf, that
is commercially available. It may be even commercially available but
modifiable. And it doesn\'t necessarily even have to be sold in
substantial quantities. There are examples that we\'ve all heard of past
inefficiencies in the federal procurement field. We\'ve all heard about
the \-- let\'s say the \$10,000 toilet seat cover? The \$5,000 hammer.
And, Lou, I understand that you used to do some federal buying for the
Air Force.\
\
L. Maestas: Well, yes, John I was in the Air Force, and those are a
couple of weird buys there, but you\'ve already picked on the Air Force
earlier. Let\'s blame these on the Navy.\
\
J. Sherman: All right, Lou. Regardless of the branch of service,
there\'s an explanation for those two items that a lot of folks probably
don\'t realize, and they were doing design specs. They weren\'t buying
obviously commercial because who would be paying that much for those two
supply items? Though only bought a few in number so the design costs or
engineering costs were spread under a much lower quantity of units, and
that\'s something we want to try to stay away from. The preference now
under service and supply contracting is for commercial items. Market
research helps us determine whether a commercial item is available. The
FAR, federal acquisition regulations, key fines commercial items as,
like I said earlier, any item other than real property that is of type
cuss mayor will he used by the general public or not governmental
entities for other than governmental purposes. In other words, it\'s
available commonly to the public, then it would be considered a
commercial item. I\'m sure \-- I\'m hoping you\'re trying to relate what
we cover in this training to your requirements at your local office.\
\
D. Bickler: You said you think that about 90% of what we buy is
commercially available?\
\
J. Sherman: Yes, if you exclude construction, because construction is
not considered part of that commercial requirement, I would say think
about 90% of what we do procure could be considered commercial.\
\
D. Bickler: And market research is a joint responsibility, right?\
\
J. Sherman: Yes, market research is a joint responsibility between the
program office or the COR and the Contracting Officer. You guys and gals
out there, when you go through and look at your requirements, you\'re
constantly probably doing market research whether you do it or not.
You\'re looking at when you develop your budget vendors and their
products. You\'re doing market research. But what I would like to do in
the training ahead here shortly is tell you and give you some additional
examples and tools so that you could further do market research in the
future. Now, what is your responsibility in conducting market research?
The first example is contacting knowledgeable individuals in government
and industry regarding market capabilities to meet your requirements. A
procurement that I had a few years back, we were doing herbicide pellet
applications \-- petted herbicide applications to reduce sagebrush in
the southwest, and we had under our requirements use of flag persons to
designate the drop zones for that application, and we let the
solicitation out, and right away I got one or two calls from vendors who
said, John, why don\'t you use global positioning systems or GPS. Get
rid of the flag persons. That would reduce your costs, probably save you
time, and it\'s an accurate method using today\'s technology. Well, the
COR at the time felt a little hesitant on changing his requirements, but
he said he would be willing to see how that worked after his project was
complete, maybe at the end of the day the vendor or awardee could go
ahead and show them how the GPS system worked. Well, it did, and he did
end up on the next procurement changing his requirements to incorporate
that newer technology. That\'s something that we need to look at, talk
to vendors, talk to others in your field that have similar requirements.
We don\'t want to just look at what we\'ve done year after year, repeat
it, historically we\'ve done that, procurement has updated the clauses
and we send it out again.

If you have a repeating requirement, like I said, you may purchase from
A to Z or have requirements, but those that you do a lot of, start
taking a little time on the side and finding out more about that project
or service. Reviewing the results of recent market research undertaken
to meet similar or identical requirements is another tool. Publishing
formal requests for information in appropriate technical or scientific
journals or business applications \--\
\
D. Bickler: John \--\
\
J. Sherman: We did do one a few years ago. This was for fencing, like I
said, Nevada and Wyoming do purchase a lot, a lot of good range techs
I\'ve worked with over the years are, specifically on this requirement,
we said, hey, we do buy a lot of this material. Are we buying it in the
most efficient and effective man center what we did was put a request
for information out, and back then it was called the commerce business
daily, now it\'s called FEDBIZOPPS. We said we were buying these
historically under invitation for bids, sealed bidding, went with the
lowest price responsible offer, but we weren\'t always getting the best
quality. We would just churn these contractors out time and time again.
We wouldn\'t be awarding to the same vendor on any continuing basis. So
they didn\'t have a buy-in to really want to do a good job for us. So we
were looking at going at multiple years and maybe making indefinite
delivery, indefinite quantity awards where we would have established
business relationships with a limited number of vendors, but we\'d still
have competition.

One of the questions that I had in the request for information was,
would you be willing to go out multiple years based on the fluctuation
in steel pricing on the Barbless wire, T-posts, stays, clips, et cetera,
and everyone came back and said, we\'d tie it to a steel index so that
prices could go up and down. Well, that was all fine and dandy, but
after calling one of the vendors back, I said, are we on target here?
And he said, you know, John, no one\'s probably told you this, and he
told me this on the side, but if you use the steel index to adjust for a
long-term contract, T posts aren\'t even tied, he said, to the steel
industry. He said, they\'re tied to the amount of used railroad rail. So
we would end up paying more by tying that procurement this steel index,
and it\'s that type of market research, if you really want to know your
commodity, you\'ve got to take that extra effort and talk to the
vendors, talk to others within your agency or others and really get down
to the \-- you know, the nitty-gritty on what\'s going on out there. You
could query government databases that provide information relevant to
industry acquisitions, including internet searches. You could
participate in interactive online communications among industry
acquisition personnel and customers, and just next week, for example,
we\'re holding what I\'m calling a vendor\'s day.

I have a procurement that I\'m working on for I.T., industrial
technology hard way, and I \-- hardware, and I\'m wanting those on the
project office, the CORs, to get up to date to today\'s technology, find
out where it is now, where it\'s going in the future, because that\'s
going to drive our requirements. One of the quickest ways I felt we
could get market research done was to bring these I.T. hardware vendors
in, and we\'re calling it Department of Interior I. vendors day, where
we\'ll ask them questions, they\'ll ask us questions. Like I said, I
want them to get up to current technology, and I also want to reduce the
number of technical questions that I had from my last procurement, which
is over 140. We didn\'t do enough market research last time and we
should have never had that many questions come in. So I guess I\'m doing
it for my own interests and our interests, but I think we\'re doing it
for the interests of getting more knowledgeable on where the marketplace
is for these commodities.\
\
Caller: I have a question from Yosemite.\
\
J. Sherman: Go ahead.\
\
Caller: does the market research include allowing for request for
quotes, for the COR to get the requests for quotes or call vendors and
ask for pricing?\
\
J. Sherman: That\'s part of it. I know historically that\'s how a lot of
CORs and project offices get their market research done, giving the
vendor require \-- vendor community the requirements before giving it to
the procurement office and getting a quote for pricing and budgeting,
however, what I\'m trying to do is get you out that routine of just
going to a local vendor and getting a quote. I\'m saying, you know, go
the extra yard if something you procure regularly.\
\
D. Bickler: What \-- it makes sense what you\'re doing out there in the
field, but instead of calling it a request for quotation, what you
should call sit a request for information. It falls under one of those
first ones John talked about. You should not give that supplier or that
small \-- local business any of the specific details about your job. You
should just get information that will help you establish pricing.\
\
J. Sherman: That\'s the first and most commonly used form of market
research used in our bureau, exactly what Yosemite mentioned, but what
I\'m trying to do is afford you a number of other options and areas you
could perform your market research. Another is obtaining source lists of
similar items from other contracting activities or agencies, trade
associations or other sources, reviewing catalogs and other generally
available product literature published by manufacturers, distributors
and dealers or available online. Conducting interchange meetings, and
this is what I\'m doing next week on a procurement that I\'m working on,
with industry, or holding pre-solicitation conferences to involve
potential offerors early in the acquisition process. Do we have another
question coming in? You may already be doing some of this in your
research but we would like you to expand on going to vendors and getting
those quotes back.\
\
D. Bickler: Not a quote, information.\
\
J. Sherman:, yes, your request for information. Now, always remember,
you may do a lot of this market research, but you also need to pass this
on in your purchase requests package to the contracting office. We would
like to know what contacts you made, the who, what, when, where and why.
We need to also supplement our market research with yours, and we don\'t
want to repeat obviously everything you\'ve done. We\'re just as busy as
you folks are. Other research conducted, such as looking in Yellow
Pages, catalog, internet, personal knowledge of the item, et cetera.
This information should be provided to the CO, and it actually becomes
part of the contract file. We could actually use this for other
requirements that are similar in nature. All right. It\'s time to get
you folks back to working again with another exercise. If you could go
to page 12 in your guide and take a couple minutes to complete the
questions. This is exercise number 4.\
\
J. Sherman: I hope everyone is on page 12 of their study manual and
we\'ll go over the three questions we have in exercise number 4. The
responsibility for initial submission and modifications, I added that
one, of the advanced procurement plan rests with, A., contracting
office, B., the budget office, C., the project office/contracting
Officer\'s representative or, D., the finance office? Is there anybody
out there that may be able to answer this question? We\'d like to hear
from you.\
\
Caller: This is Lake Havasu.\
\
Caller: We\'re from Lincoln home. Do you copy?\
\
D. Bickler: Yes, Lincoln home.\
\
J. Sherman: Lake Havasu, I think you came in first \--\
\
Caller: Lincoln home selects Charlie, C.\
\
J. Sherman: C. for the answer, and that is correct. You guys are good.
It\'s the project office/contracting Officer\'s representative. Now, the
reason why it\'s the program office and not contracting is you guys are
the ones that have the requirement. It\'s your baby. You need to submit
that so that we could get an advanced notice and start working with you
on the procurement. Great. Good answer. Number 2: agencies shall perform
acquisition planning and conduct market research for all acquisitions in
order to promote and provide for, A., design specifications unique to
the government, which can only be supplied by a single vendor; B.,
acquisition of commercial items or to the extent that commercial items
suitable to meet the agency\'s needs are not available,
non-developmental items to the maximum extent practicable; or C. full an
open competition to obtain competition to the amount applicable with due
regard to the services to be required. Or D., both B and C.\
\
Caller: We say B.\
\
J. Sherman: That\'s another correct answer. D. It\'s both B. and C. We
want to specify commercial items as best we can, and we want to allow
for both full and open competition so that we could get the best value
for our dollars. Great. The third and last is, who is responsible for
conducting market research on a commercial item buy? Is it A., the CO?
B., the COR? C., the field office manager? Or, D., both the CO and the
COR? Any responses? I hear someone trying to get in here.\
\
D. Bickler: How about Lake Havasu?\
\
Caller: Lake Havasu says it\'s D., Contracting Officer and Contracting
Officer\'s representative.\
\
J. Sherman: That\'s correct again. You guys are good. We\'ve got shared
responsibilities for market research. You guys are good. Well, you
probably had enough of me for a while, so I\'m going to go ahead, unless
you have any additional questions about market research \--\
\
Caller: I have a comment out of Barstow.\
\
J. Sherman: We have a comment from Barstow. Go ahead.\
\
Caller: We\'re looking at this planning process and we know it starts
with the project, the one that\'s originating the project, and this
happens in a perfect world, where we\'re at down here we have a district
office with engineers. We might put the project out there, have funding
for it, but they do most of the work and the planning, coming up with
the specs. So my question is, market research a lot of times, and I\'ve
been on projects where the requirements are the specs, it\'s hard to
meet sometimes because vendors in our area can\'t provide them. For
example, asphalt mixtures, thousand the specific mixture is for those
projects. How can we get around this more from the market research side
of the house? How can we intervene in this?\
\
J. Sherman: I\'m trying to understand the comment or question, but if
your local vendors can\'t meet your requirement, then you\'ll have to he
can expand your market research outside of your local area and maybe
talk to some folks with some similar issues. Is it something to do with
the climate there or something to do with the quality of the vendors or
the number of the vendors? You\'ll just have to expand \-- market
research is just about anything and everything, and you don\'t want to
box yourself into anything as far as what your approach is. I would just
expand it outside that local area and talk to peers. You know, if
there\'s any trade groups or any other publications, if this is a
technical issue about road maintenance or asphalting, then start asking
questions. Just keep moving forward on it. Does that help you at all?\
\
Caller: That helps me \--\
\
Caller: We have a question. I\'m going to go back a little bit \--\
\
J. Sherman: Wait. We have two people. I think Barstow is still trying to
finish up here. Just a second.\
\
Caller: The specifications as CORs, we don\'t know what they are, so
when we get the contract, those specifications, we can\'t find vendors
for them or don\'t have vendors in line.\
\
D. Bickler: are your specifications \-- is your project overspeced? Are
the specs too tight? Soar are they \-- is your higher up specking
exactly what you need for the work you\'re doing?\
\
Caller: See, that\'s not our determination. We get the contracts. We\'re
not in the project planning phase.\
\
J. Sherman: I think I follow here, Barstow. It sound like the COR is not
the engineer who built these specifications. What you need to do is,
like Lou said with the communication skills and responsibilities, you
probably need to go back to that engineering staff and say, hey, you
guys are writing these great specs but no one is meeting them. So you
need to work with engineering and together also with the Contracting
Officer and do market research and find out exactly why these vendors
can\'t meet that spec. It\'s a team. It\'s all three of you. It\'s
engineering, it\'s the COR, and the contracting office. But you need to
get back right away now with engineering and say, hey, we\'re not
getting the competition, we\'re not getting vendors in, and it\'s
probably or most likely based on the specs you guys are putting out.\
\
D. Bickler: There was another caller that tried to come in. If you would
like to push to talk now.\
\
Caller: This is Mary Lou. I\'m sorry for interrupting. I have a question
about the advance procurement plan, and I\'m just wondering why we post
that information for vendors to see? Because as COR\'s we\'re not really
supposed to provide them with a lot information about a project. So if
our name and number is listed, it seems like we\'re inviting them to
call us and ask questions about a project. How can we give them
information without providing advance details?\
\
J. Sherman: I\'m glad you\'re hesitant about providing them, because we
were talking about earlier ethics and what information is releasable and
what\'s not. The APP, and I didn\'t expand too much on it because I\'ve
\-- I usually stand on my soapbox as a Contracting Officer and want
better planning so that we don\'t have to word these things yesterday
all the time. But it\'s also a tool and requirement by federal law that
we give advance notice to the small business community. That\'s the
purpose of the publication. It also behooves us in getting increased
competition. The more vendors that know our, quote, general
requirements, you don\'t need to give them the specifics down to any
measurable amount of detail, or even a dollar amount. We provide a range
in the APP, but if you give them your general requirements, then the
more interested vendors we get, the more competition we get, and the
better price and quality vendor the resulting award will go to.\
\
D. Bickler: John, what would you advise, let\'s say she gets a phone
call, what kind of information is she supposed to giver out without
giving out too much information?\
\
J. Sherman: She could give high level requirements. I wouldn\'t give a
20 page statement of work with fully details specs but she could talk
generally about the requirement.\
\
D. Bickler: Just really like the \-- whatever one was on there, a very,
very vague description of what\'s to be done, because the contractor is
going to have all the other information he needs right there on the APP,
the estimated value, the location and the approximate time of year when
we hope to have that awarded. We know that sometimes the COR\'s name is
not listed, and there is \-- there\'s typically a name, isn\'t there?
It\'s either going to be the COR or Contracting Officer. I certainly
understand your hesitancy, too, and it\'s very wise of you to be
hesitant if that a contractor calls you on the information, keep the
information you provide very, very general and basic about what that
overall project is for, and discuss nothing further, is what I would
say. Does that answer your question, Mary Lou?\
\
Caller: Yeah, that does, thank you. And I think what I would do kind of
in preparation for the calls is prepare something so that I could give a
consistent answer to people who call because if they catch you one day
they may get one answer and another day, you know \-- so I think in
preparation for those calls I would want to have something there so that
I could be consistent with my answers. Thank you.\
\
D. Bickler: I would go right along with that. That\'s a good idea.
Hopefully the name that\'s on that APP is the name of the \-- somebody
that knows about the project. Lou did you have something?\
\
L. Maestas: No, I was basically going to say, Mary will you, more often
than not the vendors that are calling in, they\'re wanting to know when
is that solicitation ready to go out, and sometimes we don\'t know that.
So it may be something for us to do our little effort and go check with
the technical or the program office, if you will, but it does get a
little cumbersome sometimes.\
\
J. Sherman: Before we move onto Lou here, I want to make one quick
comment, and here I am back at market research, if you have a vendor on
the line interested in your requirement and you\'ve got questions, that
would be the ideal time. What do you think about our specs? Are they
commercial? Is this something you want to bid on? It is a form and is a
good \--\
\
D. Bickler: You couldn\'t really talk about the specs because they
haven\'t been posted out yet but you could ask the vendor, do you know
something about this type of that you want to share with us?\
\
J. Sherman: Exactly.\
\
D. Bickler: Lou?\
\
L. Maestas: Thank you. John gave us some good guidance and certainly it
takes a lot of resourceful thinking to conduct market research, good
market research will certainly do much to keep us on track to assure
good acquisitions as we go out with them, but based on this market
research, you can begin developing your statement of work or your
specifications. I want to briefly mention different ways to define your
requirement. They can be design specs or performance-based statements of
work. A design specification is one that tells a vendor exactly what to
do and how to do it. All the risk tends to fall on the government with
this type of indication, so it\'s getting more and more cumbersome with
those specifications. The type of spec that\'s pry mayor will he used
\-- is used mainly for construction projects. Those are a little more in
the design effort. Not often we get into the performance based. But
performance based statements of work describe the end result sought with
performance measurements \--\
\
Caller: Excuse me, I noticed the light was green.\
\
L. Maestas: Who is this? Who is calling?\
\
Caller: This is the national seashore calling. We\'ve had microphone
difficulties. We\'re checking in.\
\
L. Maestas: You sound good. So hopefully it\'s fixed. Anyway, the end
result sought with performance measurements and surveillance plans to
assure quality. They may also contain incentives or disincentives for
level of performance. The preferred way to contract for services has
always been to describe the desired end result rather than the method of
conducting the work. But due to poor performance and a desire for
government control, we\'ve gravitated towards telling vendors or
contractors precisely how we wanted the service performed. This did not
necessary lead to better performance. Small vendors did not want to
participate due to the complexity of the requirement and in doing this,
this put a risk of failures, the government. We are now mandated to use
performance-based service contracts to the maximum extent possible, and
certainly that\'s very true for those projects over \$25,000. We are
strongly encouraged to use them for those smaller requirements under
\$25,000 as well.

Although policies supporting performance based contracting have been in
place for quite a while now, for more than 20 years for sure, progress
still has been quite slow. The single-most important reason for that is
that the acquisition community is not the sole owner of the problem, nor
can the acquisition community implement performance-based contracting on
its own. Laws and policies and regulations have dramatically changed the
acquisition process into one that must operate with a mission-based and
program-based focus. Because of this, acquisition teams today are made
up more diverse groups of employees and hopefully adding a fresh
perspective, better insight, energy and innovation into the process. The
government as a whole is becoming more performance based. We now
strategic goals with tasks identified to meet the goals with specific
units of measure needed to accomplish this goal. We cap this information
through activity based costing. Additionally, the new employee
performance system, which the new A \-- EPAP system just now coming
onboard again just started up this year, and it\'s defining tasks with
quantifiable measures. Contracting is just one of several areas becoming
more results oriented.\
\
D. Bickler: Isn\'t there some kind of government initiative of some kind
that requires a certain percentage of our service contracts to be
awarded under performance based \--\
\
J. Sherman: Yes, Denise, there\'s been a goal, and I don\'t know the
exact percentages, I don\'t have them memorized, but I think two or
three years ago we started out with maybe a 20% goal that 20% of all our
service contracts over \-- I think we\'re now down to 25,000, have to be
performance based, and now I think we\'re well over 50% of our service
contracts that are required to be performance based.\
\
D. Bickler: Lou, you had said the entire government across the board is
going to performance based, and the EPAP is an example of how that\'s
happening?\
\
L. Maestas: Actually, we do have like \-- and I\'ve just started working
with stewardship programs and those are kind of tailored because we want
the contractors to do everything and we want the end result.\
\
D. Bickler: But even the government as a whole in its \-- even in its
personnel \--\
\
L. Maestas:, yes, you can see that now in the new performance
evaluations.\
\
Caller: We have a question from Yosemite. The question is, you notice on
the performance based statement about having incentives and
disincentives for levels of performance. That\'s very common you will
have the incentives and disincentives in a competitive bid also \-- or,
you know, I guess a final bid project. But I noticed this was a question
on the pretest, too, and to me you have it in both, you have incentives
and disincentives. Such as you may say a building has to be done by such
and such a date and it\'s a design spec and competitive bid. So I guess
\-- and it\'s not a performance based contract, because to me that\'s
the end result. Whether you have incentives or disincentives, you\'ll
have it in both types of contracts. To me, I guess I\'m having a hard
time \-- they\'re for both as far as I know.\
\
D. Bickler: Lou is going to talk more about incentives and disincentives
and I think I would have to disagree. In a sealed bid arena there are no
incentives or disincentives. It\'s very black and white in that arena.
When we give a completion date, that\'s the date. Maybe your question
will be cleared up when Lou talks about what incentives and
disincentives are.\
\
L. Maestas: Before we go further, you may be thinking of cost
reimbursement contracts and with award fee, and those are somewhat in
place for just those kind of reasons, where we need something done and
the contractor performs superbly, they earn an award beyond the
construction price.\
\
D. Bickler: Do you do your contracts as sealed bids or as design-build,
Yosemite?\
\
Caller: Some of both.\
\
D. Bickler: Even under design-build I\'m not sure \-- there might be
incentive and disincentive but that would be a negotiated procurement,
where \-- and the difference would be between negotiated and sealed bid.
Sealed bid there is \-- it is what it is. It\'s black and white. In
negotiated you can have \-- maybe you could have incentives and
disincentives and John or Lou might know about that.\
\
L. Maestas: Just keep that in mind. Let\'s keep it in perspective right
now with performance based and that we do want \-- not always \-- but
sometimes offer in incentives and disincentives in the evaluation
factors that go with it. Performance based contracts, statements or work
are required to be firm, fixed price contracts. Every now and then
that\'s not going to be feasible, so in instead of using the firm fixed
price performance based service contract there are other type of
contract types we can use such as a labor hour, time and material and
here\'s your cost reimbursement. The performance work statement includes
several elements, and as I cover these, we\'re going to fill in the key
words, and this is in exercise 5 on top of page 13. So we do have it on
the Elmo. As we go through them, John will fill in the key words there.
What we\'re talking about here is the four parts of a performance-based
service contract. The first one here specifies the key word here is
results, not the process. Specifies results, not the process. Remember
that, results.\
\
D. Bickler: Lou, would you give maybe an example?\
\
L. Maestas: Well a good example is, real simple carpet janitorial
contract where we want that carpet cleaned, we want it free of debris,
we don\'t want to see any particles on it. We don\'t care how they go
about doing that, we just want to see the carpet free of debris. That\'s
an end result. The number two there states tasks in measurable terms. In
other words here, John are, I think you had a good example of a
measurable item in a performance-based \--\
\
J. Sherman: What you want to do in a performance based statement of work
specifically they use the terminology under the four part is your
acceptable quality level. What determines the acceptable quality level?
It sounds to me like for the janitorial for carpet cleaning is that the
acceptable quality level, the minimum would be that it\'s free of
debris. So you want to try to quantify something. You don\'t want to
have something that could be misinterpreted, something that could be an
adjective. We want a very good, clean carpet. What is a very good clean
carpet to one shall \-- maybe me, I\'m sloppy and I could have a few
debris and I don\'t care. You don\'t want to use adjectives. You want to
quantify any time you can.\
\
D. Bickler: In some manner you have to define clean because clean to you
may not be clean to me.\
\
J. Sherman: Exactly \-- and the definition of clean for what Lou said
was free of debris.\
\
L. Maestas: The third area there, third part, uses a quality assurance
surveillance plan. That\'s how we\'re going to tell the vendors or
contractors how we\'re going to evaluate them and how we\'re going to
inspect them. We can 100% inspection, maybe it would be random sampling
or maybe just periodic inspection. Number four is using performance \--
here we\'re getting back to the incentives here, using performance
incentives or deductions, disincentives.\
\
J. Sherman: Number 4 here uses performance incentives.\
\
L. Maestas: Uses performance incentives and deductions. I hope you\'re
all getting that. I hope I\'m not going too fast.\
\
D. Bickler: not just for Yosemite but for everybody out, would you
please give examples of incentive and disincentive on a performance
based.\
\
L. Maestas: To back up to the quality assurance surveillance plan, this
is how we\'re going to tell the contractor we\'re going to inspect or
methods inform spec shun. We may want to look at the project 100% of the
type and inspect it 100% of the time. Every now and then we don\'t have
time so we\'re going to do random sampling. For example, no product
defects over 100. Periodic inspections we tell the contractor we\'re
going to be looking at that periodically. If we find something, you\'ll
know about it. Customers may also use \-- be used to supplement the
priority method chosen. In other words, sometimes customers will tell us
that they\'re not \-- they see some things that we don\'t see and
they\'ll give us a full report. It uses performance incentives or
disincentives \-- incentives allow us to award the contracts for
performance he can settle our set standards and deductions allow us to
accept work for less, and if it\'s that bad we may take a deduction.\
\
D. Bickler: You give some examples, John or Lou, of incentives and
disincentives?\
\
L. Maestas: Sure. If this contractor continuously exceeds our
expectations on performance, we may end up giving him a 5% increase in
the contract price for that period. Likewise, it\'s one of those
situations also where maybe, just maybe, he\'s not performing up to par.
We may end up ducting dollars from his payment. John, do you have
anything else?\
\
J. Sherman: I have an example I could show you of PBSC, the original
four part that I would like to go over with you. It\'s one we\'re
currently administering right now. If you take this first area here, the
first column, and I apologize because it won\'t all fit on the screen at
once, but you\'ll be able to see it column by column here. This first
column is the required service, and you could relate to that your
statement of work. It could be a specific task or a subtask within a
task, and we\'ll just hone in on this one here. Implement the approved
plan of action. So if this is your requirement, this is your task within
your statement of work, then the next column is the performance
standard, and then you\'ve got the maximum allowable degree of deviation
from acceptable quality level, in other words, this is your performance
level. We don\'t need to state all that. Your acceptable quality level
or AQL. The method of surveillance is the next. That\'s the third part
of the four parts.

The last is the maximum incentive or disincentive from deviating from
your AQL or performance measure. So if we go back, let\'s just look at
one of these. Performance standard, develop planned of action 30 days
after directed by COR. Support implementation of the approved plan of
action. Provide documentation of new models. Provide briefing materials
of new models. Now, let\'s see what the performance mesh sir for those
performance standards. Support provided as required in plan. They do
what they\'re supposed to do. Deliverables are accepted per plan and
approved. Then here\'s your AQL, with no significant changes. We don\'t
want to have to have them rework this. The second, then, is support
provided within 10% of plan requirements. That\'s when you\'re throwing
in your quantifiable measures. Deliverables accepted and approved with
no more than three significant changes. Then just to review the last
two, review of deliverables, probably do a physical review in this case
upon delivery, and they felt that this requirement was important enough
for success of their project that they put a 5% incentive and
disincentive to that requirement.\
\
Caller: This is Guadalupe. I have a question. If you had a
performance-based service contract for solid waste disposal, for
example, it might be difficult to say whether or not our costs would be
covered if they failed to perform, for example, if they don\'t empty \--
they don\'t show up to pick up the trash and I have to send a crew out
to go haul stuff to the landfill. Can you specify what sort of
liquidated damages you would get in such an instance? Because it might
not be 5%. It might be quite a bit more.\
\
L. Maestas: That\'s something that would have to be established ahead of
time, and, yes, you know, it\'s very important to us that they perform
accordingly. So we would have to definitely plan for that, the
contractor will know, and you bet you, we can proceed with something
like that, but it has to be up front.\
\
D. Bickler: I hope in Yosemite it\'s clear, I hope you have an
understanding of what the incentives are and disincentives are, versus
if a contractor doesn\'t complete a construction project on time. The
disincentive would be actual damages. But there is no incentive to
finish ahead of schedule. We only take money away if they don\'t finish
on time. So we have to keep moving forward and Lou \--\
\
L. Maestas: Sure. There are now two types of performance-based service
contracts. The original four part that we just covered, and then
there\'s a new type which actually has seven steps. It\'s called the
statement of objectives or SOO. There is a guide for this process, seven
steps geared to the greater acquisition community, especially program
offices that break down performance-based service acquisition into these
seven simple steps. A good comparison might be in a construction world
where you have a design build contract, in this case we\'re identifying
a problem that needs to be solved, and the contractors are going to
propose how to solve it, including they\'ll develop the performance work
statement. And the performance indicators, as well, to be used to
monitor the contract.

The process includes these steps, number 1, establish the integrated
solutions team. Number 2, describe the problem that needs solving.
Number 3, examine private sector or public sector solutions. Number 4,
develop performance work statements or statements of objectives. Number
5 Decide how to measure and manage performance, and number 6, select the
right contractor. Last but not least is 7, and that\'s how we\'re going
to manage performance. The intent is to make the subject of
performance-based acquisitions accessible and logical for all and shift
the paradigm from the traditional acquisition think into one that is
collaborative performance oriented teamwork with the focus on program
performance, improvement and innovation, not simply contract compliance.
So now we can let the acquisitions begin.\
\
D. Bickler: Just to clarify for everybody out there, we\'ve talked about
there\'s two types of performance based, one of them is the performance
work statement and one is the statement of objectives, and an example of
a statement of objectives might be what I think everybody has heard of,
the financial business management system that\'s going to be coming
online for the Department of Interior within the next \-- what, six
months to four years. FBMS was procured using the SOO method, was it
not? We gave the contractor what we were looking for and they told us
how they were going to get to that end result. Right? Down more on the
local level, at your level, an example of a SOO might be stewardship.\
\
L. Maestas: In stewardship contracts, we\'re actually wanting the
contractor to tell us though want to do the work, and we ask them to do
the safety plan and everything else to go with it. Because they\'re the
experts on removing trees and bush out in the forest areas or the plains
areas, whatever. Those are the kinds of examples, we want them to tell
us how to do it. Now on page 14 you will find exercise 6. Let\'s test
you again on this. We want you to review each item and determine whether
it is a performance-based task or not. We\'ll give you a couple minutes
for this exercise and then we\'ll go into it and see how you did.\
\
J. Sherman: Now that you have all had a chance to decide what was what,
let\'s quickly go over the exercise. You should be able to see on your
screen here in just a moment \-- grass shall be mowed at least three
times a week. Do we want to do the call in, the push-to-talk \--\
\
Caller: I would say not a PBSC.\
\
That\'s correct. Why so?\
\
Caller: Because you\'re not giving any parameters, 3 inches tall, 6
inches tall. I can mow the grass three times a week every day \--\
\
J. Sherman: You\'re entirely correct. You\'ll have a performance
standard of 3 inches tall that that grass shall be no taller than, and
it doesn\'t matter to us if they mow it one time or 100 times but our
standard is 3 inches tall or less. So you are I entirely correct. The
next question, paper towels shall be available during working hours.\
\
Performance based.\
\
J. Sherman: That\'s correct. That\'s your requirement. You don\'t need
them available during nonworking hours. You want them available during
working hours. And you don\'t need to say how many times they need to be
in there changing them so that they are filling them so that they are
available. You just basically want them to be available. Correct. You
guys are getting the hang of this. The third, calls to the help desk
shall be answered on the 2nd ring. This one is a little more tricky.\
\
Caller: PBSC. You\'re not telling them how to do it.\
\
D. Bickler: Do you think it is or is not a PBSC?\
\
Caller: It is a PBSC, because you\'re not telling them how to do that.\
\
J. Sherman: That one we could sway towards it is being a PBSC, because
that\'s our measure, and it\'s quantifiable, so it meets those
attributes, so, yeah, it would be performance based. I would probably
want to loosen that up a little bit and say it must be answered by,
let\'s say, the third ring. I don\'t know, instead of answered on
exactly the second, but that is performance based. That is quantifiable
and it is measurable. The fourth is carpet shall be free of debris, and
Lou might have tipped off on that one earlier. Is that performance based
or not?\
\
Caller: Performance based.\
\
J. Sherman: That\'s correct. We\'re not telling them, like the grass
mowing, that you need to come in three times a day to keep that
carpeting free of debris, we just want, and our requirement is that that
carpeting be free of debris. That\'s our end results. The last one, the
per visit payment for emergency calls shall be reduced \$10 for every
half hour delay after the specified response time. This might be an
attribute or not to a performance based if that gives you a hint. And it
is. This is actually \--\
\
Yes, that would be performance based.\
\
J. Sherman: That\'s correct. This is an attribute to a performance based
statement of work. It\'s actually a disincentive. So the measurable \--
or acceptable quality level is that the visit payment for emergency
calls shall be reduced \-- well, if there is a half-hour delay or less
than, then they have a disincentive applied, and that\'s the \$10. You
guys got them. Very good.\
\
L. Maestas: They did a good job, John.\
\
J. Sherman: Okay. Does anyone have any questions about that exercise?
And I think we\'ll probable\' skip through that because you got them all
correct and I think we\'re on track there. We\'re starting to see an and
accumulate samples of typical performance based statements of work that
you could work from so you don\'t have to start from ground zero. You
can find these on the BLM acquisition web page at\... Then you click on
tools. So it gives you \-- I believe we have about eight ore nine posted
up there and we\'re wanting you to review those if you\'re going to be
defining or building performance based statement of work. In addition,
there are plenty of performance based training classes available today
through the marketplace or, I believe, the national training center here
could assist you in locating one. We know that this is sometimes a
cumbersome and even complex process the first time. I\'ve had to work
through a number of them myself. I still don\'t consider myself an
expert by any means. Each case is different and you really just made to
look at what makes sense to you. You have to let go. A lot of CORs and
project offices have a difficult time getting rid every requirements
that were built over 20 years.

Sometimes you\'ll come in and say, well, we got burned on this or we got
burned on that, that\'s why we have this additional requirement, and
part of performance based statements of work is actually learning to let
go. You\'re going to say, this is our end result, this is what we need
accomplished, and we need the contractors who do this every day to tell
us how best to get that accomplished. The good news is that the more
often you write performance based statements of work the easier it gets.
There are occasions when you find through market research that

only one vendor may meet your requirements. Now Denise will discuss the
sole source procurement.\
\
D. Bickler: Okay, John. If you think that your requirement can only be
met or performed by a specific contractor you\'ll need to prepare a sole
source justification, otherwise known as a justification for other than
full competition. Unless you have done these before it\'s best to
contact your Contracting Officer prior to preparing the justification to
get their input. There are very limited situations where it is
appropriate to contract without competition. Some of the more common
reasons include only one responsible source is capable of responding due
to the unique or specialized nature of the work. The new work is logical
follow-on to an existing order. The item is peculiar to one
manufacturer, for example, a brand name item is an item peculiar to one
manufacture. And urgent and compelling need exists and following the
order of procedures would result in unacceptable delays. The rule of
thumb here under urgent and compelling is that there has to be imminent
threat to life, limb or government property. For example, ongoing fires.
Now, whatever the reason for sole source, other than urgent and
compelling, we are required to advertise our intent for sole source
award in the federal business opportunities website for 30 days. It\'s a
requirement of the FAR, and what this does is gives other vendors an
opportunity to submit evidence they\'re also capable of meeting our
requirement. Now, to close out planning, John will discuss a couple of
other special areas to think about when planning and developing your
requirement. John?\
\
J. Sherman: Okay, Denise. Since June 21st of 2001, the government has
been required to comply with section 508 of the rehabilitation act. This
applies not only to us internally but also to our contracts. This act
requires all new electronic and information technology purchased by the
federal government to be accessible to people with disabilities. This
applies to software and operating systems, web-based applications,
telecommunications products, video and multi-media products. Desktop and
portable computers and self-contained products such as kiosks,
information kiosks. Your requirements document should include language
that purchase products will be section 508 compliant. When you are
designing construction projects you need to consider the ADA, which is,
Denise \-- okay, for access throughout facilities. The next and final
topic we\'d like to cover is greening. The Department of Interior\'s
strategic plan for waste prevention and recycling, called greening of
the government, is aligned with the EPA and other regulations. The plan
includes mandates for using environmentally preferable products and
services when defining contract requirements and specifications. What
type of products are you using or do you think would be considered
environmentally preferable? On page 15 of your student guide, exercise
7, you will find a space for you to write in examples of green products
you are currently using. Or you can list some products that you might
think are environmentally preferable. Students, if you\'d like to use
your push-to-talk to share some of these answers, it would be
appreciated.\
\
Caller: This is Karl bad. We\'re currently using low mercury Flores
light tubes.\
\
J. Sherman: That\'s a great example that\'s energy efficient. There\'s
literally hundreds of others. Let me give you an idea. There\'s a few
products I would like to share with you but I would first like to go
over a little about the EPA and their \-- they call them CPG items.
There\'s about 40 that they\'re recommending that the federal government
use in their products and services. The Department of Interior under
their strategic plan has about 8, I believe, that we have specific goals
for, and they range from retread tires to recycled lumber, the plastic
and the wood chips. They also are looking at the 30% post consumer waste
\-- or use for paper, rerefined oil, energy star compliancy, all those
areas. Let me give you an example of one of the items that they\'re
looking for. These are one of the eight goals.

This is a piece of recycled carpet. It\'s actually coming from post
consumer soft drink bottles. Maybe one of you had that soft drink and
this ended up being one of the actual bottles. Here\'s the \-- it\'s
100% recycled. Just notepad paper. It\'s 100% post consumer waste, and
it\'s processed chlorine free. That\'s one of the keys, is that it\'s
been processed chlorine free. Here\'s the \-- if some of you are working
with campgrounds and doing construction, this is \-- we don\'t have to
have the brand here, but this is made out of recycled plastic and wood
chips. You also want to look when you\'re doing your greening, look at
not only the purchase price but you want to look at the Lifecycle cost.
Maybe this, and it probably is, more expensive than wood, but what you
want to do is say, okay, over the life cycle of this product is that
going to end up costing us less or more than if we bought non-green or
straight wood? If you don\'t have to put stain 1 this and pay for the
supplies or labor as often as you would a wood product, then maybe the
Lifecycle cost is lower. The federal acquisition regulation also allows
one to pay a little bit more initially if they could prove, let\'s say,
that the Lifecycle costs in the long run will be of less cost. Do we
have any questions about any of these examples or does anyone out in the
field have additional examples?\
\
Caller: What about antifreeze?\
\
J. Sherman: Antifreeze is one of the eight items also just as rerefined
oil, you are correct. An example on the rerefined oil, our Moab, Utah
office, until they started requesting from the local, let\'s say, jiffy
lube or whatever lube service out there that they start supplying
recycled oil, it wasn\'t available. So it\'s kind of like the cart
before the horse. Until we as a federal government start asking for
these type of products, they won\'t be made available and the price
won\'t start coming down. So we have to start requesting recycled oil,
recycled antifreeze in these more greener products, and just in general
this is a shared responsibility between the COR and maybe the
engineering office, if the COR is not the one coming up with the specs,
but you need to put and build in these greening requirements to your
products or services. If it comes to the CO without it, we\'ll have to
come back to you to get it built in, and Coit delay your procurement,
could make it more costly, not what you need, and it won\'t get industry
to start supplying these type of products and services.\
\
D. Bickler: Thank you very much, John. We\'ve kept them now for about an
hour and 15 minutes. So we\'re going to give you your next 15 minutes
break. As I said, time flies up here. And I think we need a break, too,
at this time, so take your 15-minute break, go stretch your legs, use
the facilities if you need to, clear your mind and we\'ll see you in 15
minutes.\
\
D. Bickler: Welcome back. Now we\'re going to shoot it over to Lou. Lou,
would you discuss the independent government estimates and the use of
mandatory sources, please.\
\
L. Maestas: I sure will. Now that you\'ve defined your requirement,
you\'ll need to develop an independent cost or price estimate. The
independent government estimate or as we shorten it out or call it IGE,
serves a few purposes. Many decisions are made from the government
estimate. It helps develop budget requirements for submission of a
purchase request. In addition we determine the procurement method, is
going to be an RFQ, which office will develop the procurement, bonding
requirements, clause inclusion and procurement review thresholds. This
information is also used to determine whether or not the prices offered
by the public are fair and reasonable. Particularly when only one offer
is received. In construction the IGE is used to state the magnitude of
the requirement in terms of an estimated price range, IE., between 25
and 100,000 is a good example. These ranges are established and required
by the FAR. In construction projects we need to have the government cost
estimate coincide with the bid schedule that\'s issued to the vendors.

A few sources for developing your IGE are \-- well, let\'s look first at
past history. We\'ve had several procurements that we can go back to
maybe for similar purchases or buys or projects. So that\'s a good way
to kind of estimate our new requirement. Of course, John dwelled a lot
and we need to be resourceful here but market research is getting more
and more important but we need to get into that mode of doing more an
more market research. In construction many of the engineers like to use
the means construction estimating guide. If you have seen that guide it
shows just about every classification used in construction, manpower,
labor hours, material costs. So that\'s another good way of determining
a cost estimate. But the key word here is independent. In other words
\-- we talked about it earlier. Don\'t call your local vendors downtown,
give them the details of your requirement and request a quote for the
work. Hey, that\'s our government estimate. I don\'t think it works that
way. When it occurs, it could potentially preclude that contractor from
competing for the requirement. If you market research you will have
gathered databases on general information about the type of work or
project without discussing your exact requirement. Now you\'re ready to
start shopping for a contractor.

As both of you probably know at this point we have to consider mandatory
or established sources. Let\'s see what sources are available and what
they have to offer. We want to start off first with purchase from the
blind or other severe disabled. This is often referred to as JWOD. These
are firms that employ blind and other severe disabled citizens. While
these contractors provide services like janitorial services and ground
maintenance, food service, most of the purchases every basically for
supplies. So when you use your credit card, this is a good and opportune
time to buy supply items from JWOD. Most of their items are located in a
GSA catalog. There is no threshold under which you are not required to
use JWOD. Their website is WWW.JWOD.gov. Maybe your requirement is for
furniture. Over the years we\'ve used the federal prison industries,
also known as UNICOR. I know there has been some changes have that come
out under the requirements, but it\'s \-- it\'s probably going to be a
good source for us to buy furniture. Their website is WWW.UNICOR.gov.
When we think of GSA, which is our next source, we tend to think only of
supply items available through the GSA catalog. Well, I know this has
been going on for a few years, but the GSA has expanded their federal
supply schedule now to include a wide variety of services such as
environmental assessments, hazmat, I.T. services and other business
practice and engineering just to name a few. John, you work with federal
supply schedules a lot, don\'t you?\
\
Yes, I do, Lou. A lot of them. And, you know, there are over 4,000
vendors under just one group alone? The GSA federal supply schedule
group 70, which is I.T. suppliers and services. And nuns environmental
consulting, and that\'s just a few. So as a COR doing these types of
projects you may very well be using this process. There is no
requirement under GSA federal supply schedules to advertise in
FEDBIZOPPS, therefore reducing your procurement lead time. You can limit
the competition among the scheduled vendors, and you will really need is
three valid quotes. It is also a streamlined process that is available
to all of us. The contracts are available on the internet at\... Some
other non-mandatory established services you may want to consider is the
interagency contractor directory which lists all departmental and
government-wide blanket purchase agreements and contracts. These are
mostly for I.T. though it is not limited to I.T. and you can find other
types of supplies and services. Sometimes these contracts are referred
to as government-wide acquisition contracts or GWACS. You can find them
at the directory\... A number of DOI.\
\
\>-wide contracts have also been posted here so please be sure to check
out and see what\'s out there. Back to you, Lou.\
\
L. Maestas: Great, John. Thanks. It is to our benefit to consider these
sources as a means of saving time and money, and they are our
established sources that offer discounted pricing. Now let\'s talk a
little bit about personal versus non-personal service contracts. Most
federal agencies do not have authority to enter into personal service
contracts. The FAR lists six key elements that constitute a personal
service contract, and they are listed on page 16 of your guide. You
should compare your work, the work that you need to have done, to this
list. It takes \-- let\'s take a look at these elements now. The first
one is performance on site. Maybe the requirement calls for principal
tools and equipment furnished by the government. The services are
directly related to the function and mission of the agency.

Number four, the same work is being performed using civil service
personnel. Five, the need for the type of service provided can be
reasonably be expected to last for more than a year. Number six, the
inherent nature of the service requires direct or indirect government
supervision of the contractor employee in order to protect the
government\'s interests, retain control of the function involved or
retain full personal responsibility for the function. The bottom line
here is that any contract that creates an employer-employee relationship
between the government and the contractor personnel is considered to be
a personal service. The Contracting Officer\'s representative may
provide technical direction as required, however, the contractor\'s
projector is responsible for the individual\'s day-to-day duties and
personal matters. The statement of work must clearly define what is to
be accomplished by the contractor. You must make it very apparent that
these employees are contractors and not government employees, and that
you are not their manager. For instance, color coded badges that
distinguish contractors from government employees, et cetera. Remember,
we do not have legislative authority to do personal service contracts
\-- contracting. To do so violates personnel laws and would cause need
for cancellation. We do have regulations in the CFR, title 5, that\'s
the personnel regulations, that allow us to contract for temporary
employees to fill in when a government employee is on sick leave or
there is a short-term task that needs to be completed. There is a
limitation on that \-- on time that we may contract for this type of
service. Consult your human resources staff for details on this process.
I know we\'ve covered a lot of material so far today, and I hope it\'s
all beginning to make sense to you. Does anyone have any questions up to
this point? Please, anything at all, go ahead and use your push-to-talk
and we\'ll see if we can answer \--\
\
Caller: Carlsbad, I have a question. I\'m guessing that maybe more than
one of these things are required for it to be a personal contract? I
mean janitorial services are done on site, but they\'re a standard
contract.\
\
L. Maestas: Yeah, it is \-- but, you know what we do here is we identify
the requirement with a properly worded statement of work, in other
words, we\'re not going to supervise that contractor and we should not
tell them what to do at all. It\'s a little ditch rent when we do the
requirement with a statement of work.\
\
D. Bickler: It\'s my understanding you have to answer yes to all six of
these questions in order for that to be considered a personal service.
If you can say no to any of these, then it\'s not a personal service.
Would either of you agree or disagree?\
\
L. Maestas: You can say no to one of them and then we would still have
to consider because there\'s some very questionable areas there that we
have to take a good look at and make that final determination.\
\
D. Bickler: I will give you an example, it\'s national with the BLM,
prior to coming to BLM, I worked for Bureau of Prisons in a prison, and
we would hire non-personal professional services of psychiatrists or
physicians that would come into the institution to do their job, and so
the answer to almost all of these is yes except for one or two, and,
therefore, it was deemed not to be a personal service because we
weren\'t giving direction. They were escorted everywhere they went. That
was the type of thing. So \-- I know at the National Business Center we
have contractors in our finance section, and so the one answer that
comes as a no is that there is \-- we do not give direction. There\'s an
on-site project manager for those people that deals with their personnel
issues and \--\
\
L. Maestas: Denise, those are certainly indicators that would help us
make these determinations and nothing more, but it\'s a very, very
touchy situation anymore with all the service \-- support service type
contracting we\'ve got going. One of the things I always lean on is that
statement of work, that if we spell out the requirement, what the
contractor is supposed to do, rely on their own project people, their
project managers and the contractor to guide his employees, finalize and
giver us our product, and that\'ser what\' looking for. It is very
touchy and more and more these days, folks, we got to keep \-- be alert
and be aware of this situation that\'s going on around others all the
time now.\
\
D. Bickler: Hold on.\
\
Caller: I\'m assuming if you notice a few of these items appearing on a
proposed contract, you want to contract your \-- contact your CO or
business center right away and say, hay, get their opinion?\
\
L. Maestas: You put it right on the nose my friend. We as contracting
officers, and many of you that have worked with me in the past, know
that I always want to maintain that good open communication, if ever you
have a question. Yes, definitely contact your Contracting Officer.\
\
D. Bickler: Was there someone else that was trying to come?\
\
Caller: This is Jim from St. George. Tell us a little bit about fed
source and how that works into this personal services.\
\
L. Maestas: Fed source? Go ahead, John.\
\
J. Sherman: I believe fed source, is that the temporary service?\
\
Caller: That\'s correct.\
\
J. Sherman: Like Lou went over real quickly, if you have an employee
that may be sick or you need a short-term assignment, you could go
through fed source. I believe the limit is up to six months.\
\
L. Maestas: John, I think \-- I went blank for just a moment, so I
apologize for that, but fed source is a source that we have used over
the years now. It\'s not \-- it hasn\'t been around too long, but fed
source, we do interagency agreements. Now, I want you to understand, an
interagency agreement, we\'re not into that mode of training, but it\'s
another means of contracting, if you will, and likewise, just because
we\'re using fed source, I have always required my people to submit a
statement of work before I enter into something like that. Okay? I
don\'t know, John, if there is any term limits on that, but \-- because
it is \-- we are dealing with a federal agency per se even though the
federal agency is doing the contracting for somebody else, but I don\'t
know of any term limits right now for that type, but it is a little
different but remember, it\'s not going to be a personal relationship.
It still has to be a statement of work, and they have to take direction
from their contractor, their project manager, if you will. Does that
answer your question?\
\
Caller: That\'s good.\
\
L. Maestas: Thank you. If there\'s no other questions, I suppose now
we\'re ready to put our purchase \--\
\
Caller: This is Kathy from Lincoln home. I have a question.\
\
L. Maestas: Go ahead, Kathy.\
\
Caller: This deals with UNICOR. Do we have to use UNICOR if a commercial
open market source can offer the product provided to the government at a
better value and a fair and reasonable price?\
\
D. Bickler: The regulations in the FAR are changing regarding UNICOR,
and, John, do you know specifically, or Linda?\
\
J. Sherman: I believe they still have to use it, but they are talking
about making that a non-mandatory source.\
\
D. Bickler: I just got a bug in my here that said under 2500 on UNICOR
is not mandatory. I think there might be something coming down that we
can compete UNICOR with open market and do what she\'s saying if it\'s
cheaper. But we don\'t know if that\'s in place or not. We can certainly
check on that and get you a firm answer tomorrow.\
\
L. Maestas: Kathy, there are some parameters in there that allow us to
submit a waiver and do it that way as well. I know there\'s been some
change. I apologize but I have not bought any furniture in quite a while
but we\'ll get you an answer for sure. Okay?\
\
Caller: Thank you. Not just furniture but any product that UNICOR does
make.\
\
L. Maestas: That\'s correct.\
\
D. Bickler: Kathy, can you tell me one more time where you\'re from?\
\
Caller: Yes, I\'m from Lincoln home national historic site.\
\
D. Bickler: We will get you an answer tomorrow. Okay?\
\
Caller: Thank you.\
\
L. Maestas: Thank you all. Now \--\
\
Caller: those of us in the Park Service \--\
\
L. Maestas: Who was this again?\
\
Caller: This is Chris from the intermountain region of the Park Service.
We missed the first exercise. Could someone go back and review the
answers to those questions for us?\
\
L. Maestas: I\'ll tell you what, just sit tight on that and mark your
page and we\'ll get to that tomorrow as well. Okay? You\'ll get your
answers. Now we\'re ready to put together a purchase request and Denise
will handle this segment. Go ahead, Denise.\
\
D. Bickler: Thanks, Lou. The first step in establishing your purchase
request is obtaining funding data. There are several laws and
regulations that require the government to have certified funds
available in the amount of the independent government estimate prior to
making the requirements public. Or to state that the requirement is
subject to the availability of funds. Now, when you\'re preparing your
PR make sure that your cost code is accurate, please. Next you need to
consider the basis for award. There are several options to be considered
here. Is it going to be an all or none or by schedule based on funds
available? If you\'re going to award based on funds available, remember
to list the line items or schedules in order of priority. How will we
evaluate the offers? Do you want to evaluate best value or price alone?
What if any are the technical evaluation factors that are important to
you? And how much more important is technical capability and past
performance than price? The Contracting Officer needs this information
in order to determine the procurement method. It also let\'s the
contractors know how we will award. The Contracting Officer needs to
know if you have a specific desired start date so that work on your
project can be coordinated. When establishing your state date, remember,
the procurement lead times are generally on a request for quotation 30
to 45 calendar days, on an invitation for bid, it\'s 60 to 90 calendar
days and owe a request for proposal it\'s 90 to 120 calendar days. The
COR must also indicate whether actual or liquidated damages are
appropriate. If you choose liquidated damages, you must provide
supporting data for the amount to be assessed.

Now, in the BLM, this information is provided on the statement of
liquidated damages form. And we\'re going to put that form on the Elmo
here and let you look at it. This form is not in your handbook but I
would be more than happy to make it available to anybody that might be
interested in it. As you can see, the top half of this is going to be an
itemization for the COR and the project inspector and any other office
staff who would on a daily basis have \-- be working on this project and
we\'re going \-- what you would do is put the general \-- their GS grade
or their hourly rate, and then underneath that is the per diem costs. Is
this project located at a remote site that the COR or the PI has to stay
in a hotel or would be traveling every day that you would have vehicle
costs? All of that is figured into and determine the statement of
liquidated damages. If you would move it up a little there. Would you
move the form up so we can see the rest of it, John? There you go. When
you add all those together you\'re going to come up with the field costs
per day. Then just below that, that\'s what you\'re going to sign and
send into the Contracting Officer and if you would keep moving it up,
John, below that, when it comes to the contracting office, we add in our
administrative costs.

If this project were to run over and we assess these costs. What we do
in our office, there\'s five contracting officers in our office. So we
take the average hourly rate, so we \-- of us, and we add our clerical
staff for about half an hour a day, the Contracting Officer is one hour
a day and we don\'t typically include a feel fee because our attorneys
wouldn\'t necessarily be involved with us every single day. So we don\'t
put the legal fee in there. So we\'re going to add up our Contracting
Officers\' cost, the field cost per day and then we\'re going to
mitigate \-- let\'s say it\'s \$265.75. We\'ll have a mitigation factor
there. We\'re going to round up or round down so we have a round nice
easy figure to deal with when they\'re calculating out those damages for
the day. Okay? And, again, that\'s not in your workbook but I\'m happy
to make that available. We have it electronically, to anybody who would
be interested in it. Another piece of information required for the CO
regards the site inspection tours. A site inspection tour is strongly
suggested for construction and service projects. Let me skip back one
moment to that liquidated damages. Those are pry mayor will he used on
construction projects. You could use them on services but you have to
justify them. I have only seen those on construction. Site inspection,
you should include any specify information that prospective contractors
must be aware of when they attend the site tour such as a special
vehicle requirement, will they need a lunch, will they require overnight
accommodations? If the site happens to be in a remote location that
requires a four-wheel drive vehicle and four hours to get to or two
hours to get to, we need to tell the contractors that, bring a
four-wheel drive, the tour should last about this many hours, you\'re
responsible for your own lunch, that type of information. So we need
that in order to put it in the solicitation. The procurement office then
will coordinate the date right before we get ready to post the
solicitation. Now, for construction projects, the CO will also need to
know how many days after the issuance of the notice to proceed you need
Oreo want to start work. Generally it\'s 10 calendar days after the
notice to proceed. The Contracting Officer will need to know when you
want work to begin, which is the same thing, really, as after the notice
to proceed. Do you want a work to begin immediately after contract award
or is it something that can\'t be started until a specific date, maybe
in the spring or the summer, because it\'s tied to campground usage
dates, maybe the migration of the deer, whatever the reason might be, we
need to know that so that we can tell the contractor and can he take
that into consideration when figuring his prices.\
\
L. Maestas: You know, Denise, I just sense some questions out there
regarding service contracting. Every now and then it\'s not \-- we have
issued notice to proceed for service contracting. It just depends on the
situation.\
\
D. Bickler: Thanks, Lou. Now, you also have the opportunity here to
supply information on anything that may impact performance of contract
work. This may include deer migration, spawning season for fish, spring
runoff, or seasonal activities such as hunting season. Now, check for
central contractor registration for contractors in your area that you
know might be interested in the project. If they are not in the central
contractor registration or CCR, you should encourage them to get
registered as that\'s a requirement of the FAR now. If you know of an 8A
firm or other small businesses that can compete, please let the
Contracting Officer know. Now we have a completed PR package and it
should include at a minimum a purchase request with funding, a statement
of work or specifications, maps and drawings, an independent government
estimate and the date that the work is required. Remember, please, that
yesterday is not an acceptable date. Once you\'ve compiled your
requirements package, you\'ll need to submit it for approvals such as
funding, special approvals for I.T. programs, purchases of accountable
property or whatever might be required in your office. Does somebody \--
was somebody trying to come in?\
\
Caller: Denise, can you explain those liquidated damages again?\
\
D. Bickler: What specifically \-- do you have something specific you
want to know?\
\
Caller: What occurs those damages? Where do those damages come for from
the BLM? Is it something we\'re outlining \--\
\
\
\
D. Bickler: Let me get a little more specific about that. If you \--
like I said, you have a choice of actual damages or liquidated damages.
Actual damages are assessed \-- let\'s say the contractor does not
finish the job on time and he is a month late. The government has the
right to assess actual damages, and what we know from history is that
actual damages are hard to prove and they\'re difficult to collect.
Liquidated damages, on the other hand, are stated up front in the
solicitation so every vendor or contractor knows these liquidation
damages will be assessed if the contract is not completed on time. Like
I showed you on that form, you as the COR and me the CO, we\'re going to
come up with the daily liquidated damage rate for every day that
contractor is past his performance period. It\'s not a penalty. It\'s a
damage. So it has to be reasonable. I have only one time ever had to
refigure the liquidated damage statement because the figures that came
into me, I thought, were unreasonably high, they were well over a
thousand dollars and I just felt that was an unreasonable assessment to
the contractor. Does that answer your question?\
\
Caller: Yes.\
\
D. Bickler: So \--\
\
Caller: What\'s the real difference between incentive and in liquid
damage \-- or disincentive, whichever way you want to look at it?\
\
D. Bickler: You stand back from your mic just a little bit and repeat
that question?\
\
Caller: What\'s the difference then between a liquidated damage or an
actual damage and an incentive or disincentive.\
\
J. Sherman: They are two separate contract types. Liquidated damages,
either actual or liquidated, are referred with construction contracts
specifically, and incentives and disincentives are referred to in
service contracting, specifically fixed price. That wouldn\'t
difference.\
\
L. Maestas: Those are generally assessed or provided during performance
whereas the liquidated damages is at the end of the contract when the
contractor fails he will be assessed damages.\
\
D. Bickler: Really, it\'s the word \-- it\'s truly supposed to be a
damage. How will the government be damaged if the contractor doesn\'t
finish on time? Typically I see liquidated damages in my contracts when
the location of the work is remote and it requires a great deal of
travel time or it requires staying in a hotel for extended periods of
time. Now, in actual damages, I will give you an example, we could say
to a contractor, you were a month late in finishing, and I\'m going to
charge you the salary of my COR and my PI for that month. The contractor
can come back and say, he would have made that money regardless of
whether the contract was finished on time or not, but if I say it up
front in a liquidated damage, he can\'t argue that. So, did we answer
your question about the difference between the liquidated damage in
relation to an incentive or disincentive?\
\
Caller: Yeah, I was just referring to if you looked in Webster to what
incentive and disincentive and versus liquidated damages, it ought all
comes out to be the same.\
\
J. Sherman: It\'s the same principle but they\'re used in different
contract types. You\'re correct.\
\
D. Bickler: So this process \-- what was I talking about? Well, the
process has \-- of issuing a solicitation has been done electronically
using IDEAS for the last several years, and this is probably good time
to take a few minutes to talk about the brand-new system we\'re all
going to be implementing over the next few years and it goes well beyond
changes in our procurement systems. John, would you go over FBMS for
us?\
\
J. Sherman: I certainly will, Denise. We\'re in for some huge
improvements, however, all I can say right now is hold on, get ready to
roll up your sleeves if you are part of the new implementation team. The
Department of Interior is in the process of upgrading nearly all our
financial and business systems to one integrated system called FBMS or
financial and business management system. There are three bureaus that
are going to be coming out this next \-- or this coming October, two
that were on the be a cuss system for finance and then the BLM. We\'re
all due to roll out in October.

The functional areas that will be included are budget execution and
activity-based costing, acquisition, property, COR financials, like
accounts receivable and payable, and travel. So we\'ve got some major
systems that we\'re going to be integrating. We\'ll also be getting into
a new management information system called E-MIS. Some programs that we
aren\'t changing right away but interfaces are being built so that they
can integrate with this new system called FBMS. These include your
budget planning using BPS, our budget planning system, billings and
collections, or CBS and AFMS and performance workload measures. Several
of these systems I just mentioned are used only at BLM but you probably
have similar systems in your agencies as well. BLM is among the first
agencies to implement going live, like I stated, in October, and it is
expected to be at least another three years or more before the entire
department is fully implemented. Changes as a result of the FBM will be
significant, as all agencies in the DOI will adjust business processes
and move toward operating one department-wide platform for all business
and financial activities.

The anticipated benefits are no redundant data entry, less chance for
errors, less expense in maintaining multiple systems throughout the
department, and the ability to obtain data without manual data calls.
We\'ve all had enough of those, I\'m sure. Things as basic as cost codes
and organizational codes will look different than they do now. See every
employee will be impacted some \-- impacted at some level or another.
You will be hearing more and more about FBMS and training is currently
being developed. The issue we\'re most concerned with here is, of
course, IDEAS, our current procurement system, which will be replaced by
a new acquisition system called prism. We\'re on the why the side \--
we\'re on the contracting side and we have a lot work to do converting
our existing contracts and orders to the new platform before we flip the
switch at the start of the next FY. You\'ll probably be hearing from COs
to validate whether open contracts are still valid so that we can close
them out before this migration. Another impact to you will be a new way
of entering funding called line item accounting. Right now we use
contract level, and line item accounting requires more specific
information. You or someone in your office will be entering this data
into the new purchase request. It also looks like cut-off dates for
making procurements will be at the end of the fiscal year even earlier
this year. So we\'re talking now the first week of September. So what
did we talk about earlier in regards to planning? Please, if we could
get that planning done earlier any year, this is going to be the one
that that we need it. All of our systems will be down the month of
October while this conversion takes place. In the long run, it will be
great to have systems that talk to each other throughout the DOI, but
like anything new, there will be some growing mains as we implement.
There is a website that contains lots of information about FBMS at\...
Back to you, Denise.\
\
D. Bickler: Thanks, John.\
\
Caller: Question from Boise. Name is Benedict. I have ongoing contracts
going from year to year. We can\'t put the new funding into the system
until October when we know the funds are available. So this guy goes
without being paid for a month or better because we\'re down or what?
Over.\
\
J. Sherman: That is a good question and we may have to do things
manually for those \-- it\'s actually three weeks in October, from what
I\'m told. On our side in contracting we\'re going to have to convert
these ongoing contracts such as yours, all the modifications, all the
funding data into the new prism, the new acquisition system and FBMS.
Those three weeks that we won\'t be live, we\'re going to have to try to
probably get maybe some invoices in sooner or we may be \-- hopefully
not, but we may be paying a few days\' interest \--\
\
Caller: It\'s not the question of getting invoices in time. It\'s the
question of having funds available. If you have expended all your FY05
money for your service contract and then the contract rolls over in the
new year and there\'s no money to put into IDEAS or whatever system you
use until the new system comes up in \'06, that contractor is screwed.\
\
J. Sherman: Well, right now we shut down after the first of October for
two weeks, at least, minimum anyway. We don\'t have a financial system
until we close out the old fiscal year. So we\'re always running at
least two weeks dead in the water the first two weeks of October
regardless of implementing a new system.\
\
Caller: In the past we\'ve been able to with budgets to come up with
money. For two years now I\'ve been having to find ways to take money
from one year and carry it on over in a carryover but this year the
budgets are so dismal that opportunity isn\'t there. So my contractors
are in trouble. \-- right. At this point they haven\'t informed us of
any contingency plans for those three weeks, three or four weeks we\'re
down, but they may be working on some plan in order to keep things
flowing. But like John said, I understand your issue about trying to
shift the money around, but part of it does have to do with invoicing,
and if he times his invoice right \--\
\
J. Sherman: If it\'s my understanding, you\'re from the national Park
Service?\
\
D. Bickler: No, he\'s from Boise.\
\
J. Sherman: I just got a note he was. The Park Service doesn\'t get
rolled out for another year or two.\
\
D. Bickler: Are you with BLM?\
\
Caller: Yeah, this is Boise BLM. It\'s performance based service
contract for recreation site maintenance that reups every September 9th
on a three-year program. So I have to put money into the following year,
hook or by crook from one fiscal year to get into it another one to
cover this close down of MIS. Now it\'s going to wait three weeks or
more it\'s going to be more difficult because the base funding and
everything else is collapsing.\
\
J. Sherman: Trust me, I have a number of these type of services
contracts also, and just like a continuing resolution, we\'re going to
have to scrimp, beg and borrow the money with a can keep to keep these
vendors going. I don\'t see it much different than that. But we\'ve got
now within BLM from now until October to look at contingencies and
please ask your local contracting staff if they\'ve heard anything or if
there are, like Denise said, contingencies they\'re working on.\
\
D. Bickler: I\'ll step out on a limb a little bit and say you need more
information or you want to try to get a better handle on how you might
handle that situation, you could also contact your state procurement
analyst and for that that\'s Judy WHELAN. Call her or shoot it be able
to help you out.\
\
Caller: You just talked about the FBMS. Where is the funding going to
come from for the training after implementation of the system?\
\
J. Sherman: Well, you know, you probably want to talk to the folks that
are directly involved with that, but as far as the training, that\'s,
for contracting, we\'re told is going to be coming up in our busiest
time of the year, fourth quarter, or soon therefore, maybe the first
couple of weeks in October. I\'m not certain who is going to be paying
for the funding. It\'s probably up to the bureau, I\'m sure. I don\'t
know if it\'s down to the field level or not. I\'ll be honest with you,
I would have to research that and get you an answer.\
\
D. Bickler: It\'s kind of frustrating right now because everything we
just told you is all that we know. Every procurement office, though, and
every state has an FBMS lead and I know every state\'s procurement
analyst is involved. Last week they were all out in November for a big
kickoff. The best thing we can tell you is if you have questions about
FBMS, contact your fate procurement analyst. We\'re getting kind of
short on time so we want to move on now, and from what we just said, it
looks like the CORs need to try to work to get your requirements put
together and submitted as early as possible this year. Let\'s do a few
review questions on page 19, exercise 8 in the study guide, and we\'ll
answer these questions. We\'re going to give every give you a few
minutes and go over the answers with you. Okay?\
\
D. Bickler: Okay. Let\'s go over these questions, then. Number one, if
the initial purchase price of a green product is higher an non-green
product but the Lifecycle cost of the green product is lower, you must
still purchase the lowest cost product? Is that true or false? Anybody.\
\
Caller: False.\
\
D. Bickler: We have a false. That would be the correct answer, false.
The greening requirement, John was kind of hurried through that a little
bit, but the greening \-- maybe you can expound on why that\'s false.\
\
J. Sherman: Again, just like some. Products that you buy as a consumer
yourself, it\'s just not the initial purchase price that one looks at.
It\'s the ultimate price for having that product\'s use for that
Lifecycle. On the decking material, let\'s say the initial purchase
price is higher than another product, let\'s say real wood, but if over
the years the maintenance of that decking material costs less, and the
ultimate Lifecycle cost is less, we can and should choose the green
product.\
\
D. Bickler: So your answer is correct. Number one is false. Number two,
at what threshold must you use JWOD sources? Oregon, we haven\'t heard
from you. From my list it looks like everybody in the state for BLM \--\
\
Caller: 0.\
\
D. Bickler: That would be number C and that would be correct. There is
no threshold requirement for JWOD. Any requirement that you have that
could be met by JWOD you need to use that source. Number three: on a
task order issued against a federal supply schedule contract, I don\'t
need to obtain competition since they\'re under contract with GSA
already. True or false?\
\
Caller: False.\
\
D. Bickler: False. That would also be a true \-- I mean, a correct
answer. The answer is false. The FAR is pretty explicit you still have
to compete it within the schedule that you\'re buying from, and you need
to get at least three quotes. Number four: which solicitation type would
be used for a janitorial contract estimated at \$65,000? An IFB, an RFQ
or an RFP?\
\
Caller: RFQ.\
\
D. Bickler: RFQ. That would be correct. Under \$100,000 it\'s the
simplified acquisition procedures, and that would be a request for
quotation.\
\
Caller: What page is that on, Denise? Nowhere in this course have I
heard anything yet in this course about IFB and RFP and when they apply
and what \--\
\
L. Maestas: I think we haven\'t mentioned that. That will be coming up.
You got the answer right, thank you, but we will get it later.\
\
D. Bickler: We apologize for that.\
\
Caller: Can you repeat the correct answer, please?\
\
D. Bickler: For number four the answer is B, request for quotation.
Request for quotation, number B is the answer to four. We apologize. We
have not gone into a lengthy discussion about the thresholds. But we
will tomorrow.\
\
L. Maestas: Now they know the answer and that\'s great.\
\
D. Bickler: We have run out of time for today, so that\'s it for
today\'s day one of COR refresher. Before we go, are there any last
questions about anything that we\'ve covered today? Okay. If you think
of any questions between now and our second session tomorrow, feel free
to fax them to us and we\'ll answer them first thing in the morning. We
will get that answer for Kathy, I believe, on \-- I don\'t remember the
topic, but I made a note. Okay, thank you very much, and we\'ll see you
all tomorrow morning.