CRA Training Contracts SEPTEMBER 24 2019 What Well

CRA Training – Contracts SEPTEMBER 24, 2019

What We’ll Cover: Grant v. Cooperative Agreement v. Contract Types of Federal Contracts General Process for Federal Contracts Federal Acquisition Rules and Statutes Pathway to the “FAR” General Construct of the “FAR” Primary Issues Important to Universities Sample “FAR” Clauses

Grant An award of financial assistance, the principal purpose of which is to transfer a thing of value (money or property) from a federal agency to a recipient to carry out a public purpose of support or stimulation. - More flexibility with deliverables, period of performance & reporting. - Uniform Guidance applies. (No FAR applicability) - Does not generally involve sensitive or classified information - Basic and applied research objectives/aims. - Publication is encouraged - Little to no involvement from the government on the programmatic side.

Cooperative Agreement An award of financial assistance that is used to enter into the same kind of relationship as a grant; and is distinguished from a grant in that it provides for substantial involvement between the federal agency and the recipient in carrying out the activity contemplated by the award. Substantial involvement means federal employees are directly performing or implementing parts of the award program Example: A research program where certain specialists employed by the government are involved in a collaboration with the non-federal Cooperative Agreement recipients. Uniform Guidance applies. (No FAR applicability)

Contract Legal instrument used to acquire supplies, systems, IT, construction or services for the federal government’s direct benefit or use. Definition: mutually binding legal relationship obligating the seller to furnish the supplies or services and the buyer to pay for them. (FAR 2. 101) - Paid with appropriated funds - Subject to the Federal Acquisition Regulation (FAR). - Less flexibility with deliverables, period of performance & reporting.

Types of Federal Contracts: Cost Reimbursable Fixed Price Indefinite Delivery Indefinite Quantity (IDIQ) Time & Materials

Cost Reimbursable Payment for “allowable and allocable costs” actually incurred in the performance of the project Estimated budget and funding ceiling (“not to exceed”) OMB Uniform Guidance cost principles apply FAR Part 31 Contract type risk is on the Buyer, because the Seller is only obligated to make a good faith effort to meet the Buyer’s needs.

Fixed Price Sponsor is able to determine that the price quoted is reasonable Funding for a specific dollar amount, regardless of costs actually incurred Usually includes milestones/tasks Contract type risk is on the Seller, because the seller must provide an acceptable deliverable at the time, place, and price specified

Indefinite Delivery Indefinite Quantity (IDIQ) General Terms and Conditions agreed upon, then Task Orders are issued for set quantities of goods or services Can think of it similar to a “Master Agreement” with subsequent “Task Orders”

Time & Materials Pay for supplies or services based on actual hours worked or material costs Not typically used with Universities, as time is tracked on a % of Effort rather than per hour basis

General Process for Federal Contracts 1. Pre-Proposal ◦ Govt. identifies a need, conducts market research ◦ PI may talk with technical reps, potential subcontractors, etc. 2. Solicitation/RFP/RFQ ◦ Govt. invites public to submit proposals (or sole source based exemptions provided by law) ◦ Includes terms and conditions applicable to award ◦ Questions/Clarifications 3. Proposal ◦ University – LEGALLY BINDING ◦ States exceptions to terms & conditions ◦ Provides technical objectives and cost for the project ◦ Submits in proper format by the solicitation. ◦ Govt. reviews bids/offers/proposals – selection criteria in solicitation & FAR

General Process for Federal Contracts (cont’d) 4. Negotiation/Discussions ◦ Govt. & Prime Recipient agree on applicable terms & conditions ◦ FAR & Other regs balanced with state & University policies/laws 5. Award Issued 6. Contract Administration ◦ Reporting – financial/technical ◦ Modifications ◦ Termination & Close Out ◦ Disputes, patent reporting, property accounting, final invoicing,

Contracting Officer v. Contracting Officer’s Technical Representative Contracting Officer (CO): ◦ Person who issues the award and/or modifications ◦ Can bind the Govt. contractually ◦ Authorized by a “warrant” Contracting Officer’s Technical Representative (COTR) may be referred to also as COR: ◦ Works with CO to monitor technical aspects of award ◦ Reviews/approves deliverables & invoices ◦ CANNOT bind the Govt. contractually

FEDERAL ACQUISITION RULES AND STATUTES

FEDERAL ACQUISITION RULES AND STATUTES

What is the FAR? Pursuant FAR 1. 101 – The Federal Acquisition Regulations System is established for the codification and publication of uniform policies and procedures for acquisition by all executive agencies. The Federal Acquisition Regulations System consists of the Federal Acquisition Regulation (FAR), which is the primary regulation, and agency acquisition regulations that implement or supplement the FAR, such as the Defense Federal Acquisition Regulation Supplement (DFARS). Translation: FAR and FAR supplements are the federal regulations that govern how executive agencies through their warranted contracting officers acquire supplies, services, construction, major weapons systems, research & development, etc. The current and most applicable FAR and FAR Supplements can be found at http: //farsite. hill. af. mil/vmfara. htm.

What are the FAR supplements? Pursuant to FAR 1. 301(d) - Agency acquisition regulations implementing or supplementing the FAR are, for -(1) Military: The military departments and defense agencies, issued subject to the authority of the Secretary of Defense; (2) NASA: activities, issued subject to the authorities of the Administrator of NASA; and (3) Other Civilian Agencies: The civilian agencies other than NASA, issued by the heads of those agencies subject to the overall authority of the Administrator of General Services or independent authority the agency may have.

Pathway to the “FAR” United States Code (USC): Represents the laws of the US Code of Federal Regulations (CFR): Represents the policies and procedures of the US CFR is the implementation of the USC Title 48 of the CRF is the Federal Acquisition Regulation (FAR) System

Purpose of the FAR Reduce costs (administrative & price of services) Increase quality Create efficiencies ◦ Including establishing uniform acquisition procedures for all federal agencies Promote competition and obtain services at the best value to the government Improve government integrity, fairness & transparency re government contracts Tells the CO and COR all of the acquisition procedures

When does the FAR come into play? Proposal stage: Responding to an RFP Completing Reps and Certs Award stage: Prime contract direct with a federal agency with clauses incorporated in full text or by reference ◦ Review prescription for rationale for why the CO included it in the contract Subcontract with a non-federal under a federal prime contract ◦ Review clause to determine if it should be flowed down Issuing a subcontract under a federal prime contract.

General Construct of the “FAR” FAR is composed of 53 Parts 1 through 6: General procedures, definitions, administrative mandates Parts 7 through 11: Acquisition planning Rest: Various topics such as pricing, competition and sole source rules, contract administration, services, quality assurance, labor laws, protests, clauses etc. All Parts are important, but most significant are: FAR 15 – Contracting by Negotiation FAR 19 – Small Business Programs FAR 27 – Patents, Data and Copyrights FAR 33 – Protests, Disputes, and Appeals FAR 52 – Contract Clauses Most Significant Misconception: Many acquisition professionals think FAR is for contracting only! FAR includes mandates for PM, Logistics, Engineers, Pricers, CORs, Security Officials, Organizational Management, PIs, Laborers, etc.

General Construct of the “FAR” (cont’d) Each “PART” addresses a specific contracting topic Procurement, Audit, Conflicts of Interest, etc. Each PART is repeated across all Chapters Part 45 in Ch. 1 addresses Property Management (52. 245 -1) & Part 45 in Ch. 9 addresses Property Management specific to DOE (952. 245 -2)

Provisions and Clauses “Solicitation provision or provision” means a term or condition used only in solicitations and therefore applies only before contract award. “Contract clause” or “clause” means a term or condition used in contracts or in both solicitations and contracts, and applying after contract award or both before and after award. Contract clauses can appear in solicitations and contracts, but solicitation provisions should only appear in solicitations. Example: (b) Insert the following provisions in solicitations for the acquisition of commercial items, and clauses in solicitations and contracts for the acquisition of commercial items:

Prescriptions All FAR and FAR Supplement provisions and clauses have a prescription, which is linked in each provision or clause in order to determine applicability of the provision or clause. The intended audience of FAR and FAR Supplement provisions and clauses is the Government’s contracting officer and their establishment of a solicitation and awarding of a resulting contract. For Example: Note that the clause will always start with a prescription as highlighted below, and the reviewer can flip to the prescription language contained in a different FAR section. CLAUSE STATES: 52. 243 -1 -- Changes -- Fixed-Price. As prescribed in 43. 205(a)(1), insert [52. 243 -1—Changes—Fixed-Price]. The 30 -day period may be varied according to agency procedures.

Primary Issues Important to Universities Understanding terms of a Prime Award when University is a subcontractor or is issuing a subcontract Right to Publish Intellectual Property Title to Property & Equipment Cost Principles & Allowable Costs Export Control IT Security

Sample FAR Clause FAR 52. 227 -3 Patent Indemnity Requires that the Govt. be indemnified for patent infringement in certain cases Tension: Applicable law often prevents a state University from agreeing to indemnify any entity in a research contract

Sample DFARS Clause DFARS 252. 204 -7000 Disclosure of Information Prevents the release of any information related to the project without advance approval of the govt. Prescribing Clause 204. 404 -70(a) requires its inclusion when contractor will have access to or generate unclassified information that may be sensitive (not just “classified”) and inappropriate for public release Tension: University mission & fundamental research exception (also impacts Export Controls)

Sample FAR Clauses Fly America Act (Section 47) Transportation of government contracts must occur on a US flag air carrier Certain exceptions may apply Tension: Requires careful monitoring of travel – essentially restriction on use of funds v. individual booking travel at least expensive rate

Sample FAR Clauses FAR 52. 230 -5 - Cost Accounting Standards --Educational Institution ◦ Purpose: Incorporates OMB Uniform Guidance FAR 52. 245 -1 – Government Property ◦ Purpose: Addresses the disposition and accounting of all property associated with the project FAR 52. 232 -22: Limitation of Funds ◦ Purpose: Requires Contractor to notify the Govt 1)When expenditure reach threshold (usually 75%) AND 2) If expenditures are more or less than obligated total FAR 52. 227 -11 : Patent Rights – Retention by the Contractor ◦ Purpose: Implements Bayh-Dole Act and allows the university to elect claim ownership of patents it develops under the contract.

Any Questions?