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Timestamp: 2017-10-22 22:45:36
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COR Surveillance - Construction Contracts - Contract Administration - The Wifcon Forums and Blogs
COR Surveillance - Construction Contracts
By cdhames, March 15, 2016 in Contract Administration
cdhames 0
I'd be interested to know how Operational DoD offices have been handling the surveillance requirements for construction contracts.
Under FAR 46.4, - Quality assurance surveillance plans should be prepared in conjunction with the preparation of the statement of work.
Under DFARS 246-401 - For contracts for services, the contracting officer should prepare a quality assurance surveillance plan to facilitate assessment of contractor performance, see 237.172. ... (this seems to imply FAR 37 Service contracting - does FAR 37 Service contracting include construction? Under Subpart 37.3 - it discusses Demolition and Construction Wage Rates - it seems the argument on whether Construction contracting can be considered a Service is becoming more obscure, instead of clear).
DoDi 5000.72 - Table 2 (Minimum requirements for Types A, B, and C training are described in Tables 2, 3, and 4, respectively.) infers that a Surveillance Plan is required.
Perform technical and administrative contract surveillance and reporting responsibilities in accordance with the letter of designation and surveillance plan.
However in DoDi 5000.72 - Table 1 it suggests a QASP only under performance-based services (not mentioning a QASP anywhere else in the DoDi).
24. For a performance-based services contract, order, or agreement, perform on-site surveillance in accordance with the QASP
Otherwise, the DoDi is silent on surveillance. Does this mean the agency should determine their own surveillance requirements for construction?
There doesn't seem to be anything written that says we shouldn't build a QASP in conjunction with construction Statement of Works. But for those that do construction contracting, it seems redundant to do so. In fact, the entire COR designation requirement for construction seems redundant since the majority of Program Managers already perform inspection (blue books, daily inspection logs, etc IAW with their own internal Civil Engineering procedures... which are ultimately handed over to contracting as part of the close-out file).
How do your office handle surveillance?
See the contract clause at FAR 52.246-12, Inspection of Construction. Please do not put any FAR Part 37 requirements in a construction contract. You shouldn't use a statement of work -- you should use plans and specifications instead -- see FAR 36.102 and 36.202. Then, you have solved your problem.
Thank you. I'm not sure how FAR 52.246-12 answers this question in terms of what to use for COR surveillance; particularly when compared to FAR 52.246-4 which essentially states the same thing but for FFP Services. Are you referring to the first paragraph which states, "The Contractor shall maintain an adequate inspection system ..."? Both clauses essentially state that the contractor is responsible for inspection; but that the Government reserves a right to step in and inspect at any time.
As far as using specifications for surveillance, I agree; but what specification document are you suggesting? For many construction projects, only Statement of Work and drawings exist, to include mention of any "widely recognized standards or specifications promulgated by governments, industries, or technical societies" as stated by FAR 36.202(b) which opens surveillance up to every published regulatory specification in the U.S. concerning construction. I think this is where a QASP simplifies things -where a COR or QAP (for old) can condense the relevant "widely recognized standards" into a manageable surveillance plan. My question is, is a QASP right for construction? There seems to be no clear guidance on what construction surveillance consists of in the context of appointing a COR.
My answer -- QASPs are not appropriate for construction contracts. FAR Part 36 applies, not FAR Part 37. FAR 37.604 introduces QASPs for performance-based service contracts and sends one to FAR Subpart 46.4. I have never used a QASP for a construction contract.
I also have never used a SOW for a construction contract. FAR 36.202(b) talks about references in specifications to "widely recognized standards or specifications promulgated by governments, industries, or technical societies" -- it doesn't talk about references in statements of work. However, you say you see statements of work for "many construction projects" -- if SOWs work for you and are your agency's practice, that's okay with me.
I share my insight as a long-time construction contracting officer -- others may give different insights. But let's go back to something you wrote in your original posting--
2 hours ago, cdhames said:
There doesn't seem to be anything written that says we shouldn't build a QASP in conjunction with construction Statement of Works. But for those that do construction contracting, it seems redundant to do so.
As you wrote above, nothing says you must use a QASP and it seems redundant to do so. For me, that's enough reason not to do it. If you try hard enough, you can force a QASP into a construction contract. If you do, it will be your choice -- you don't have to.
I agree with the sentiment but I'm still not sure I agree with the way you're going about it. FAR Subpart 46.4 discusses the need for a surveillance plan, and how to define them (i.e., the plan should specify all work requiring surveillance; and the method of surveillance). FAR 37.604 is just a reference to FAR Subpart 46.4 as you stated. FAR 46 states that "This part prescribes policies and procedures to ensure that supplies and services acquired under Government contract conform to the contract’s quality and quantity requirements."
I have a construction contract with a requirement for quality surveillance, IAW DoDi 5000.72. Assume I plan to appoint a COR. Does Part 46 apply? If you define services acquired under Government contract as non-construction, then no, although I don't know why you wouldn't (we're attempting to define construction in terms of whether Quality Assurance applies, not a clause). But I don't have a right answer here (this is part of my question).
If FAR 46 does apply to construction, then the assumption is 46.4 applies as well. In that case, we do need to ensure that services acquired under Government contract conform to the contract's quality requirements, and we should specify work, and method of surveillance.
Assuming you don't agree with this line of reasoning, how do your CORs conduct surveillance?
I really don't have time to respond in detail today. USACE requires a Contractor Quality Control System for construction contracts, including a CQC Plan as a deliverable. We require an internal Government Quality Assurance System, including an internal QA plan. We don't publish the QA plan
joel, I'd be interested in finding out how the USACE handles the DoDi 5000.72 COR requirement as well since they're DoD.
FAR does not define services. FAR 37.101 defines service contract. FAR 2.101 defines construction. FAR does not define construction contract, but it is reasonable to think that a construction contract is a contract for work that FAR defines as construction. Read the two definitions. They are not compatible. Moreover, FAR treats services and construction in separate parts and prescribes different clauses for them. Why is the matter obscure to you? The distinction seems perfectly clear. While economists and economic statisticians consider construction to be a special category of services, that categorization does not affect the treatment in FAR. As for dismantling, demolition, and removal, it is not construction. Think about it. The Davis Bacon Act, etc., applies to DDR because many of the same kinds of laborers and trade unions are involved in that work.
The concept of the quality assurance surveillance plan was developed by the Air Force in the late 1970s and first described in 1979 in Air Force Regulation 400-28, "Base Level Service Contracts." That regulation was an attempt to treat severable services like manufacturing and to apply manufacturing statistical quality assurance methods to services. It never did work well in practice, and the regulation was superseded and ultimately cancelled, but not before it was adopted by OFPP in 1980 as OFPP Pamphlet No. 4. AFR 400-28 and Pamphlet 4 are virtually identical, and Pamphlet No. 4 is readily available online. See Ch. 4, "The Surveillance Plan."
Unlike services, construction is a well-defined industry with a strong culture, long-established practices, and a massive literature of practice. In construction, "quality assurance" or "surveillance" are more commonly known as inspection, which is an industry specialty with trade-oriented subspecialties and certification programs. If you want to better understand construction quality assurance/inspection, put down your FAR and other regulations and pick up a copy of something like Construction Codes and Inspection Handbook by Taylor, or Construction Inspection Manual by Mahoney, or Introduction to Engineering Construction Inspection by Fisk and Rapp. You can also find all sorts of helpful information on the internet or in a public library.
During the performance-based contracting craze of the late 1990s and early 2000s, the idea of quality assurance surveillance plans was picked up the PBC advocates and added to FAR, but it lost many of its original attributes. Now it means little more than a plan for periodically checking the performance of contracts for ongoing severable services. The statistical methods have largely disappeared. The requirement in FAR 46.401 for QASPs expressly applies to contracts for services, not to contracts for construction. If you understand QASPs and the nature of construction, the reason should be obvious. CORs on construction projects mainly perform inspections, track progress, document the weather, keep track of subcontractor comings and goings, receive and forward communications to and from the contractor, make records of events such as discovery of defective specifications and differing site conditions, record materials deliveries and equipment arrivals, and coordinate various site activities.
It may be a good idea to develop an inspection plan for a construction project, but don't confuse such a plan with a quality assurance surveillance plan for ongoing services. They are different things, because ongoing services and construction projects are different and surveillance (inspection) methods are different. In that regard see DODI 5000.72, Mar. 26, 2015, Enclosure 6, Table 1, Item 3(c), and the reference to "quality assurance surveillance plan or other performance surveillance plan." Emphasis added.
How has some offices handled surveillance on construction contracts? In the Army, I've seen many KO's waive a QASP in the contract file. The reason? Because "it's a construction contract". They read AR 70-13 which discusses "Mgmt of Services Acquisition" and that reg states it "excludes construction". They then take that as gospel and totally forget what FAR Part 46 says. What the CORs are doing? Who knows.
FAR Part 46.4 does not discriminate or single out services, construction or manufacturing:
(a) Government contract quality assurance shall be performed at such times (including any stage of manufacture or performance of services) and places (including subcontractors’ plants) as may be necessary to determine that the supplies or services conform to contract requirements. Quality assurance surveillance plans should be prepared in conjunction with the preparation of the statement of work. The plans should specify --
246.102 Policy.
Departments and agencies shall also—
(1) Develop and manage a systematic, cost-effective Government contract quality assurance program to ensure that contract performance conforms to specified requirements. Apply Government quality assurance to all contracts for services and products designed, developed, purchased, produced, stored, distributed, operated, maintained, or disposed of by contractors.
(2) Conduct quality audits to ensure the quality of products and services meet contractual requirements.
(3) Base the type and extent of Government contract quality assurance actions on the particular acquisition.
If you are going to build something whether it's a building, widget, whatever, you should document who will do what, when and how. That is your surveillance / inspection plan. Surveillance / inspection is really the same in the end, call it what you want. It's still the act of making sure the work is IAW contract requirements (SOW, PWS, Drawings, Specifications, etc). Construction can have numerous milestones. You don't wait till the end product to do inspections, and you don't just "wing it" day-to-day. You need to have a plan, identify milestones, and document what work will be inspected, when it will be inspected, and then work that into planning with the contractor. The concept is very similar to building an aircraft. For construction, 52.246-12 is your friend.
And the FARs definition of “Acquisition” means the acquiring by contract with appropriated funds of supplies or services (including construction) by and for the use of the Federal Government through purchase or lease, whether the supplies or services are already in existence or must be created, developed, demonstrated, and evaluated. Acquisition begins at the point when agency needs are established and includes the description of requirements to satisfy agency needs, solicitation and selection of sources, award of contracts, contract financing, contract performance, contract administration, and those technical and management functions directly related to the process of fulfilling agency needs by contract.
1 hour ago, BowtechDan said:
FAR Part 46.4 does not discriminate or single out services, construction or manufacturing...
I disagree with that. FAR does make a distinction ("discriminate"). FAR 46.401(a) calls for preparation of a QASP in conjunction with preparation of the statement of work. Construction contracts and orders don't have statements of work. They have specifications and drawings (plans) or, in the case of small projects, just drawings. See FAR 52.236-21, "Specifications and Drawings for Construction (Feb 1997)." FAR substantively mentions statements of work in only Parts 35 and 37. There is no mention of them in Part 36.
See FAR 46.103(a):
Contracting offices are responsible for—
(a) Receiving from the activity responsible for technical requirements any specifications for inspection, testing, and other contract quality requirements essential to ensure the integrity of the supplies or services (the activity responsible for technical requirements is responsible for prescribing contract quality requirements, such as inspection and testing requirements or, for service contracts, a quality assurance surveillance plan)....
Emphasis added. For those of you who work for DOD, see DFARS 237.172:
Ensure that quality assurance surveillance plans are prepared in conjunction with the preparation of the statement of work or statement of objectives for solicitations and contracts for services.
See also DFARS 246.401:
The requirement for a quality assurance surveillance plan shall be addressed and documented in the contract file for each contract except for those awarded using simplified acquisition procedures. For contracts for services, the contracting officer should prepare a quality assurance surveillance plan to facilitate assessment of contractor performance, see 237.172. For contracts for supplies, the contracting officer should address the need for a quality assurance surveillance plan.
Emphasis added. Note "should prepare" versus "should address the need." As I pointed out in my earlier post, QASPs for services were an attempt to apply manufacturing QA methods to services, which explains the reference to QASPs for supply contracts. In addition to QASPs, FAR mentions "production surveillance plans."
As we have discussed many times at Wifcon, construction is a service in economic and industrial terms, hence the occasional "services (including construction)" we see in 29 places FAR and in about the same number of places in the other chapters of Title 48. But FAR makes a clear distinction between rules applicable to service contracts and rules applicable to construction contracts. FAR requires QASPs for service contracts, not construction contracts. This should be clear from the language in FAR and the history and development of the QASP concept.
My concern here is concept and terminology, and I have no other disagreement with BowtechDan. I'm pursuing this topic only because I don't want people to get more confused than they already are. A QASP is a particular type of surveillance plan. I don't object to the development of an inspection/surveillance plan for a construction contract if the plan adheres to industry practice and is not apparent from the specifications and drawings or applicable building code. If a specification calls for a particular test for poured concrete at a particular phase of installation, the CO should know the work schedule and who will perform the test. The construction literature should provide plenty of guidance in that regard.
I wonder if the confusion is also due to the reference of a document as proper noun versus that of wording just to identify a needed document that is a plan to approach quality assurance for a Government contract?
Consider the definition at FAR 46.101 for “Government contract quality assurance”, inclusive of the title of FAR Subpart 46.4.
The FAR and DFAR does not define “QASP”, the AFFARS does, the DAR references it is used as related to performance based contracting and the EPAAR refers to it with regard to a Award Term Incentive Plan. When used as a full term and capitalized the references are only in FAR Part 37, not capitalized in any DFAR use, with other supplements going back and forth and when capitalized no definition is provided suggesting strongly that the term has a confused definition with conclusion that one must revert to its plain meaning especially when use of the full term is not capitalized.
As a proper noun the Quality Assurance Surveillance Plan (QASP) is defined as a document related performance based contracting (ref. an internet search of the term) , informal use of the term “quality assurance surveillance plan” is just a reference to any plan created to monitor the performance of a contractors quality. Probable synonyms – COR Work Plan, Government inspection system.
C Culham, you are probably right, we're getting hung up on terms. To me, FAR Part 46 is clear, you develop a plan (call it what you want) on how you are going to perform "government contract quality assurance". “Government contract quality assurance” means the various functions, including inspection, performed by the Government to determine whether a contractor has fulfilled the contract obligations pertaining to quality and quantity.
- (c) Government contract quality assurance is conducted before acceptance (except as otherwise provided in this part), by or under the direction of Government personnel;
- (a) Develop and apply efficient procedures for performing Government contract quality assurance actions under the contract in accordance with the written direction of the contracting office; (emphassis added - do we document this or do we just "word-of-mouth?)
- (a) Government contract quality assurance shall be performed at such times (including any stage of manufacture or performance of services) and places (including subcontractors’ plants) as may be necessary to determine that the supplies or services conform to contract requirements.
BLUF: Document (develop and apply efficient procedures) how you are going to reasonably ensure we are getting what we pay for. Call that procedure whatever you want.
Could be, Carl.
BowtechDan: The way people, especially contracting people, apply terms (words and phrases) reflects their grasp of concepts, and concepts are crucially important, so let's not wave off discussion of terms. cdhames has raised a genuine issue. What is a QASP and when and for what do we need one? Why would a QASP not be appropriate for construction? This is a discussion board, so let's discuss. Let's get hung up. Wouldn't you rather do that than read yet once again a question about exercising options under delivery orders? I would. But I'll understand if you or anybody else is bored and wants to sign off.
Now, see the Defense Acquisition University's ACQuipedia entry for “Quality Assurance Surveillance Plan (QASP),” https://dap.dau.mil/acquipedia/Pages/ArticleDetails.aspx?aid=07612fab-5891-4078-abfc-a6a7ca2b8c0a
QASPs will vary depending on several factors (e.g., type of contract, complexity and criticality of services, location of services, performance requirements and standards). However, a well designed QASP will contain the following critical components:
• Methods of Surveillance: The applicable mix of contractor metrics, random sampling, periodic inspection, 100% inspection, customer feedback and third party audits, as appropriate, that are specified to properly monitor performance and quality.
• Sampling Guide: A sampling guide is a written procedure which states what will be checked, the Acceptable Quality Level (AQL)1 and how the checking will be done. Using the sampling guide, the COR can accept or reject the service, based on the AQL.
• Decision Tables: When a service has failed to meet AQL, a decision must be made as to who is at fault (contractor or Government). A decision table is used for this purpose. The decision table identifies different kinds of unsatisfactory performance, probable cause factors, and the things from which these factors could result.
Checklists: Used to record what has been checked by a sampling guide and to record information on contract items not covered by sampling.
Aside from the references to "services," the big clues to the nature of QASPs are the references to "surveillance," "a sampling guide,” and "acceptable quality levels" (AQLs). Why "surveillance" and "sampling"? Surveil and surveillance connote ongoing observation. The Oxford English Dictionary defines surveillance as keeping watch or guard over someone or something, as in Maintain surveillance of Soviet nuclear submarines. Surveillance is the appropriate term in connection with the PBC concept, which applies primarily, though not entirely, to contracts for ongoing services, under which the same kinds of tasks are performed continuously, continually, or repetitively over an extended period of time, usually a year, and often simultaneously at multiple locations. The government can’t employ enough people to be everywhere all the time to keep an eye on such performances, and a single failure probably is not enough to prompt T for D. So the government makes sample observations during increments of time and applies AQLs to determine when performance was at an acceptable level. That kind of surveillance is generally inapplicable to construction, in which inspection of trade work is normally performed for specific trade work at specific times and places as required by the sequence and progression of the project. Inspection connotes a specific, rather than ongoing, examination, which is typical in most construction. OED: "To look carefully into; to view closely and critically; to examine (something) with a view to find out its character or condition."
BLUF: cdhames, you don’t want QASPs, as defined in ACQuipedia, for construction projects.
I've seen so many instances of misusing AQL's in service contracts. ANSI Z1.4 usually doesn't apply, but PRS's try to some time! LOL As for AQL's in construction....it's easy. You have specs. Those specs may have + or - ranges. That is your AQL for the task. It's different from acceptance lots of widgets, or "97% of the time" as an acceptable service AQL.
Sampling is about efficiency, hence develop and apply efficient procedures
ACQuipedia may say no QASP, but the DODIG does. http://www.dodig.mil/pubs/documents/DODIG-2015-059.pdf
EDIT: And DAU says otherwise also: https://dap.dau.mil/aap/pages/qdetails.aspx?cgiSubjectAreaID=3&cgiQuestionID=115308
Construction is a service if you look at the Taxonomy of Services: http://www.acq.osd.mil/dpap/policy/policyvault/USA004219-12-DPAP.pdf
I agree that Acceptable Quality Levels (or Limits) (AQLs) are misused. I think that's due to poor education and poor reg writing.
But let's not call spec tolerances AQLs in construction. They are very different things. An AQL is a statement of the maximum number of defective units in a sample--the maximum number of defective instances of performance. Here is the ANSI Z1.4 definition"
(Acceptance Quality Limit) is “the maximum defective percent (or the maximum number of defects per hundred units) that, for purpose of sampling inspection, can be considered satisfactory as a process average”.
A spec tolerance (+/-) on the other hand is not a matter of an acceptable number of defects in a sample, but of permissible variation from a target value. If the target is 9 ½ inches, and the tolerance is +/- ¼ inch, then an inspected value of 9 ¾ inches is not indicative of a defect.
Yes, sampling is about efficiency, and also practicability. 100 percent inspection is simply impracticable in many if not most cases. You don't have enough people to do it, and doing it would hinder performance.
I'll disagree with you on spec tolerances are not AQL's. The specs determine a go/no-go range. An AQL is about defects to an extent, but more about allowable variation. When an AQL is between x and y number of defects and still considered good (or acceptable), that is our range or variation. So for construction, our range is "+" or "-" 3 inches. Anything outside of that range is unacceptable. For widgets, we may have a lot of 100 and 2 bad is acceptable, or taxi service may run on time 97-100% and still be acceptable. American Society of Quality defines an AQL as the maximum percentage or proportion of variant units in a lot or batch, for the purpose of acceptance sampling.
BowtechDan:
Yes, we'll disagree.
AQL is a formally defined term: it is a number of "defects" in a randomly chosen sample, and it has a specified statistical application in acceptance sampling by attributes. I showed you the definition from ANSI Z1.4, the publication that you cited in an earlier post. I think the term first appeared in MIL-STD-105 in the late 1940s, but I'm not sure. It may have come from Shewhart.
A construction spec tolerance is not a measure of defectiveness, and in and of itself it has no statistical application. It is a permitted variation from a specified dimension. See tolerance in RSMeans Illustrated Construction Dictionary, 4th ed., p. 561.
Defective services are not permitted, but they happen, and when they do the government can reject or require correction of defective instances of service, even if the number of them fall within the applicable AQL. It just cannot reject the entire "lot" (usually, a month) from which the sample was taken. Tolerances, on the other hand, are permitted. Work that falls within a tolerance is not defective, and the government cannot reject or require correction of such work.
The concepts are very, very different.