# Presentation: 658504

## Contract AdministrationUnauthorizedVersion

** **

- Jim Drew, ACT-7

- 2006

- FAA Procurement Officials

## Contract Administration	

**Here’s a few points that we believe are important to emphasize...**

## Contract Administration	

**1. A Support Services Contract must not evolve into a Personal Services Contract.**

## Contract Administration	

**A Support Services Contract must not evolve into a Personal Services Contract.**
- Watch out for situations where a Government employee supervises or assigns work directly 	to the contractor employee.
- The contractor employee is not the employee of the Government worker.

## Contract Administration	

**2.****  ****Beware of Labor Category / Skill Level Creep**
**	**

## Contract Administration	

**2.  Beware of Labor Category / Skill Level Creep**
- Don’t let a “Secretary” be raised to an “Administrative Officer” when the job responsibilities have not changed.
- There is always pressure on the COTR and CO to increase the wages of a contractor employee above that specified in the contract.

## Contract Administration	

**	****3.  ****Be wary of the introduction of new ****	****positions, labor categories, and ****	****skill levels.**
**	**

## Contract Administration	

**3.  Be wary of the introduction of new positions, labor categories, and skill levels.**
- Why is this new position needed?
- Why is this “consultant” needed?
- Why is this “Subject Matter Expert” necessary?
- Has the Government’s “need” been tailored for 	the person proposed to fill the position?
- Who is this person related to?

## Contract Administration	

**It is not your responsibility to provide employment for contractor employees.****  **
**	**
**	****(Or, It’s not your money so you have no right to establish your own “Save the Contractor Employee Program.”)**
**	**

## Contract Administration	

**4.   It is not your responsibility to provide employment for contractor employees.**
- The Government has NO obligation to insure that contractor employees continue to receive a paycheck.  Obtaining work for its employees is the job of the contractor.

## Contract Administration	

**4.   It is not your responsibility to provide employment for contractor employees.**
- When the contract, task, etc. is over, IT IS OVER.  The contractor employee moves on to whatever other work has been obtained for her by her employer, the contractor.
- Her continued employment on the contract is not your responsibility nor the responsibility of the Government.

## Contract Administration	

**4.   It is not your responsibility to provide employment for contractor employees.**
- It may sound cold, or heartless, or unfeeling, but this is the nature of the Government / Contractor relationship.

## Contract Administration	

**Misplaced Loyalty**
**	****(Or, don’t forget who brung you to the dance.)**

## Contract Administration	

**5.   Misplaced Loyalty**
- Don’t get so cozy with contractor personnel that it clouds your judgment, or compromises your duty to the Government.
- The decisions you make within the scope of your responsibility must always reflect what is in the best interests of the Government.

## Contract Administration	

**5.   ****Misplaced Loyalty**
- Remember that you took an oath of office when you became a Government employee.  The contractor didn’t.  Nor did the contractor employee.

## Contract Administration	

**  ****6.  Inspect, Inspect, Inspect**
**	**

## Contract Administration	

**6.   Inspect, Inspect, Inspect**
- Make sure that deliverables meet the specifications of the contract.
- Remember that acceptance is final, absent latent defect, fraud, or such gross mistake that amounts to fraud.

## Contract Administration	

** ****Data and Rights in Data are two different things.**
**	**

## Contract Administration	

**7.  Data and Rights in Data are two different things.**
- If the deliverables are data (computer software or technical data) make sure they have the correct markings.

## Contract Administration	

**7.  Data and Rights in Data are two different things.**
- If the data is marked “Proprietary” or “Limited Rights Data”, or “Restricted Rights Computer Software” and the contract calls for “Unlimited Rights” DON’T accept them.

## Contract Administration	

**7.  Data and Rights in Data are two different things.**
- Return the data to the Contractor and tell them to revise or strike the markings and deliver the data as required by the contract.

## Contract Administration	

**7.  Data and Rights in Data are two different things.**
- If the markings are not authorized, or incorrect, it is much easier to reject the data NOW, then to accept them and try to strike incorrect markings later.

## Contract Administration	

**7.  Data and Rights in Data are two different things.**
- If you reject data with nonconforming markings, the contractor does not get paid until you resolve the matter.

## Contract Administration	

** ****8.  ****What authority and responsibility do you have as a COTR?**
**	**

## Contract Administration	

**What authority and responsibility do you have as a COTR?**
- Read and understand the delegation that you have received from the Contracting Officer.

## Contract Administration	

**8.  What authority and responsibility do you have as a COTR?**
- Note that observations, comments, suggestions, opinions, wishes, and mere expressions of “wouldn’t it be nice if ...” can (and will) be interpreted by wily contractors as authorizing changes to the contract for which he will be handsomely paid.

## Contract Administration	

**8.  What authority and responsibility do you have as a COTR?**
- Your basic obligation and responsibility is to report issues and problems to the contracting officer.

## Contract Administration	

**9.  DO NOT EXCEED YOUR AUTHORITY**
**	**

## Contract Administration	

**9.  DO NOT EXCEED YOUR AUTHORITY**
- No one but the Contracting Officer may change the contract terms and conditions.
- If you direct the contractor to perform work not authorized by the CO, you have committed an unauthorized commitment that will require a “ratification” by the CO.

## Contract Administration	

**9.  DO NOT EXCEED YOUR AUTHORITY**
- This ratification is discretionary with the CO and you may become personally liable for the work the contractor performs.

## Contract Administration	

**9.  DO NOT EXCEED YOUR AUTHORITY**
- Even if the CO determines that ratification is in the best interests of the Government, you are subject to disciplinary measures for acting outside your authority.

## Contract Administration	

**10.**** ****Make sure that modifications to the contract do not exceed the scope of the contract.**
**	**

## Contract Administration	

**10. Make sure that modifications to the contract do not exceed the scope of the contract.**
- What is the purpose of the mod in view of the purpose of the contract?

## Contract Administration	

**10. Make sure that modification to the contract do not exceed the scope of the contract.**
- Is the price being changed?
- Is the period of performance being changed?
- Is the number of items called for being changed?
- Is the function or specifications of the item being changed?

## Contract Administration	

**10. Make sure that modification to the contract do not exceed the scope of the contract.**
- Does the change materially alter the contract such that the field of competition for the contract, as modified, would be significantly different from that which competed for the original contract?

## Contract Administration	

**11. And if it does?**
- If the mod is out of scope, you must justify the modification as a single source mod ***or*** conduct a new acquisition.
- In scope / out of scope is a Government determination, not one to be made by the contractor.

## Contract Administration	

**12.  Watch out for “Waiver”**
**	**

## Contract Administration	

**12. Watch out for “Waiver”**
**Whenever you fail to insist upon the rights you established in the contract, the contractor may properly assume that you really don’t care if he performs according to the terms and conditions of the contract or not.**
**Now you got a problem.**

## Contract Administration	

**12. Watch out for “Waiver”**
**If you fail to assert your right to promptly terminate a delinquent contractor, ****OR**** **
**If you fail to enforce your delivery schedule within a reasonable period of time, ****THEN**
**You may be stuck with the contractor making delivery whenever he feels like it.**

## Contract Administration	

**12. Watch out for “Waiver”**
**	****-  **If you waived the delivery schedule, the Contracting 	Officer may re-establish a binding schedule either 	through:
- Negotiation with the contractor and a bilateral modification
- Unilateral modification based upon what would be reasonable for this particular contractor given the contractor’s circumstances

## Contract Administration	

**13.  Who wants to use your contract?**
**	**

## Contract Administration	

** ****Who wants to use your contract?**
- Why should someone else want to place work under your contract?
- What’s wrong with their own contract?
- Labor rates too low to satisfy their own contractor and your rates are higher?
- Will your contract support the additional work?
- Be wary of the stated reason.  (The reality may be quite different.)
**	**

## Contract AdministrationUnauthorizedVersion- an example

** **

- Jim Drew, ACT-7

- 2006

- FAA Procurement Officials

## Contract Administration	

**Here’s a case:**
_**Advanced Team Concepts v. U.S.**_
- (Sept 28, 2005)

## Contract Administration	

**ATC supplied instructors to teach courses for LDC since 1996.**
**Jennifer Lee was Director of LDC:**
**Scheduled courses, instructors, paid invoices,**
**Researched proper way to exercise authority to hire contractors,**
**Advised her supervisor about her conclusions,**
**Discussed how to pay the contractors with the Contracting Officer,**
**Both her supervisor and CO authorized her to continue.**

## Contract Administration	

- Director Lee’s process:
**Sent out tentative training schedule at beginning of each fiscal year to all vendors, including ATC;**
**ATC reserved instructors for dates;**
**After course completed, ATC would submit invoice to Lee of payment;**
**Lee completed SF-182 for payment;**
**When necessary, Lee would cancel and reschedule courses with the vendor.**

## Contract Administration	

- Director Lee retires in November 2000,
- New Director Langton cancels the rest of ATC’s scheduled courses for the remainder of the year (2000),
- Reschedules the courses for a new contractor, Giraffe Consultants,
- In June, 2000, sends out tentative schedule for 2001, but warns vendors that there may be changes in the courses and processes.

## Contract Administration	

- ATC is told that LDC would not be requiring its services in 2001;
- ATC sues;
- Wants damages for canceling courses for the shortened 2000 school year and for the whole of 2001.

## Contract Administration	

- Implied-in-fact contract?
- What is needed?
**Mutuality of intent to contract,**
**Offer and acceptance**
**Consideration**
**Actual authority of the Government Agent to bind the Government**
**Apparent vs. Implied Authority**

## Contract Administration	

- Apparent Authority – created by the law based on equity (fairness)
- Implied Authority – arises from actual intent of the Government.

## Contract Administration	

- Implied-in-fact contract?
- What is needed?
**Mutuality of intent to contract,**
**Offer and acceptance**
**Consideration**
**Actual authority of the Government Agent to bind the Government**
**Apparent vs. ****Implied Authority**

## Contract Administration	

- Implied-in-fact contract?
**For 2000?**
**Yes, all four factors found.  Implied Authority of Director Lee to bind Government.  **
**Implied-in-fact contract found.**
**For 2001?**
**No, uncertainty of contract in Director Langton’s letter created ambiguity in offer and acceptance.**
**No mutual intent to create an implied-in-fact contract.**

## Contract Administration	

- What about Christian Doctrine?
**Inserts clause into contract even if it’s not there**
**Applies when law or regulation requires clause**
**Unless Government acts in bad faith. **
- Read in Termination for Convenience Clause?
**For courses not rescheduled for 2000?**

## Contract Administration	

- What about Christian Doctrine?
- No.  Government could not claim that there was a Termination for Convenience clause in the 2000 contract.
- _Bad Faith._  Termination was not for the benefit of the Government, but for the benefit of the former Director.