Contract Monitoring in ProTech Service Contracts

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Contract monitoring in ProTech service contracts involves evaluating contractor performance, ensuring compliance with standards, and identifying potential issues to improve program performance. The basic objectives include meeting government needs at a fair price, while purposes focus on enhancing ProTech program performance and financial controls. Examples of fair opportunity in contracting aim for clear understanding and resolution of issues. ProTech Contracting Officers play a crucial role in knowing requirements and monitoring techniques, while upholding ethics and standards of conduct. The COR Work Plan serves as a baseline for project management and tracking contract progress.

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Monitoring ProTech Service Contracts

DEFINITION DEFINITION Contract Monitoring Contract Monitoring [ noun, verb, kon-trakt mon-i-ter-ing ] Contract monitoring is a regular process of evaluating contractor performance based on measurable service deliverables, and verifying compliance with the standards, terms and conditions in the contract. 2

BASIC OBJECTIVES BASIC OBJECTIVES 1. To get what the government needs 2. When it needs it 3. At a fair and reasonable price 3

PURPOSES OF PURPOSES OF MONITORING PROTECH MONITORING PROTECH ORDERS ORDERS Improve ProTech program performance Identify potential problems Evaluate agency performance controls Assure that financial documentation is adequate and accurate Identify program and/or financial problems as early as possible 4

EXAMPLES OF FAIR EXAMPLES OF FAIR OPPORTUNITY OPPORTUNITY EXCEPTIONS EXCEPTIONS Three major goals 1. To achieve clear and mutual understanding of the contractual requirements 2. To understand what the contractor is planning to do 3. To answer contractor questions and resolve potential problems 5

PROTECH CONTRACTING OFFICERS PROTECH CONTRACTING OFFICER S REPRESENTATIVE ROLE REPRESENTATIVE ROLE Know the contract requirements Determine monitoring techniques to be used Develop a work plan Monitor performance Keep the Contracting Officer (CO) advised 6

ETHICS & STANDARDS OF CONDUCT ETHICS & STANDARDS OF CONDUCT Treat contractors impartially (FAR 3.101-1) Do not accept gratuities Do not discuss employment opportunities with contractors Avoid conflicts of interest Safeguard source selection or proprietary information. 7

THE COR WORK THE COR WORK PLAN PLAN A baseline for project management and scheduling A simple tool for tracking contract progress An aid for the post award orientation conference 8

ELEMENTS OF A ELEMENTS OF A COR WORK PLAN COR WORK PLAN Administrative items (e.g., contract number, dollar amount, type of contract) Historical factors Monitoring techniques Documentation of the contractor s performance Areas of concern or conflict 9

EXAMPLE COR WORK PLAN OUTLINE EXAMPLE COR WORK PLAN OUTLINE 1. Contract Number and Title: Criticality Designator: Contract Amount: $ (base year); total of $ for all 5 years Contract Type: Date of Award: 2. Responsibilities under Contract (as detailed in designation letter) Determining the adequacy of contractor performance Representing the government in directing work Ensuring compliance of work with requirements Advising the CO. 10

EXAMPLE COR WORK PLAN OUTLINE EXAMPLE COR WORK PLAN OUTLINE 3. Government Points of Contact Contract Administrator: Responsible for: Day-to-day inspection and monitoring Documenting inspections Following through on deficiencies. 4. Contractor: 5. Location of Files 6. Contractor s Scope of Work To provide all management, supervision, labor, materials, supplies, and equipment (except as specified) To plan, schedule, coordinate, and ensure effective performance of: 11

EXAMPLE COR WORK PLAN OUTLINE EXAMPLE COR WORK PLAN OUTLINE 7. Place of Performance: 8. Contractor Reporting Requirements Annual Daily/Periodic Schedule submitted five workdays prior to start date and then annually Daily Work Report (GSA Form 64 or equivalent), submitted daily to the COR Quality Control Program, submitted five workdays prior to start date Resumes of initial and replacement supervisors. 9. Contractor Milestones 10.Previous Contracts (This is a first-time contractor. There is no information on file for this contractor.) 12

EXAMPLE COR WORK PLAN OUTLINE EXAMPLE COR WORK PLAN OUTLINE 11.Potential Problem Areas All supplies, materials, and equipment used by the contractor must conform to specifications and must, on request, be identified; possible problems could be avoided by requesting a listing prior to the start date and prior to any substitutions. Space for locker rooms for contractor personnel, for storage of equipment and supplies, and for use as the contractor s onsite office is to be government-furnished; this space should be identified and inspected prior to the start date. Contract does not specify which official will determine when the contractor s personnel will be diverted for snow removal or emergency conditions; when given, these instructions should be in writing to avoid disputes over deductions. The contractor is to have the opportunity to re-perform deficient services and ensure future services before deductions are taken; however, no time limit for remedial action is specified. 13

EXAMPLE COR WORK PLAN OUTLINE EXAMPLE COR WORK PLAN OUTLINE 12.Monitoring Contractor technical and schedule techniques to be used: Making onsite visits and personal observations Contacting the quality assurance specialist Reviewing progress or status reports. 13.Documentation The contractor s performance will be documented in the contract file using: Monitoring Report. 14.Action Requirements Attend post award preliminary briefing on (Date) with CO to discuss roles and responsibilities for post award conference with contractor, scheduled for (Date). 14

STEPS IN MONITORING CONTRACTS STEPS IN MONITORING CONTRACTS Monitor performance under the contract Determine how to document monitoring actions Select the techniques used for monitoring Determine what functions need to be monitored 15

DETERMINE WHAT NEEDS TO BE DETERMINE WHAT NEEDS TO BE MONITORED MONITORED Contractor technical and schedule compliance Costs (in cost-type contracts) The financial condition of a contractor The contractor s statutory compliance 16

SELECT THE TECHNIQUES USED SELECT THE TECHNIQUES USED FOR MONITORING FOR MONITORING Monitoring techniques include: Conducting meetings Making onsite visits and other personal observations Reviewing contractor reports Reviewing tracking and management systems 17

DETERMINE HOW TO DOCUMENT DETERMINE HOW TO DOCUMENT MONITORING ACTIONS MONITORING ACTIONS Meeting Minutes Correspondence o Letter o Email Surveillance reports o Technical Analysis 18

DOCUMENTING PERFORMANCE DOCUMENTING PERFORMANCE ISSUES ISSUES A description of the performance problems Discussion of mitigating or extenuating circumstances, if any Indexed file or related documents documenting performance problems An analysis of the impact that the contractor s performance problems have had on: o Overall cost o Delays in obtaining needed services o Mission accomplishment. 19

GOVERNMENT GOVERNMENT- -FURNISHED PROPERTY FURNISHED PROPERTY Supervise the initial transfer of government property Monitor the contractor s use of government property Monitor the disposition of government property 20

TRANSFER OF GOVERNMENT TRANSFER OF GOVERNMENT PROPERTY PROPERTY Establish an inventory list of the property being delivered Set up management requirements Inspect government-provided equipment Document transfer 21

USE OF GOVERNMENT USE OF GOVERNMENT PROPERTY PROPERTY Ensure the contractor maintains an adequate property management system Perform periodic property audits Record any notification from the contractor that the government- furnished equipment is in need of repair Report of any shortages, losses, damage, destruction, or misuse of GFP to the CO 22

DISPOSITION OF GOVERNMENT DISPOSITION OF GOVERNMENT PROPERTY PROPERTY When the contract is completed, the government may: Request that the contractor deliver government property back to the government Request that the contractor deliver government property to another government contract site Dispose of the property. 23

DISPOSITION OF GOVERNMENT DISPOSITION OF GOVERNMENT PROPERTY PROPERTY When disposing of property, the government may choose one of the following options (listed in preferred priority order): Allow the contractor to purchase or retain the government property at cost Return the property to the suppliers Use the property within the government Donate the property to eligible entities (e.g., schools, charitable organizations) Sell the property Donate the property to other public agencies (e.g., state and local governments) Abandon the property. 24

DOCUMENTING DELAYED DOCUMENTING DELAYED PERFORMANCE PERFORMANCE Identify the existence of a delay Substantiate the evidence of the delay Substantiate the costs associated with the delay Determine if the delay was excusable (i.e., beyond the contractors control and without its fault or negligence) Potential alternatives and resolution recommendations Pros and cons of each listed alternative or resolution Notify the Contracting Officer 25

DECISION TABLE FOR SELECTING DECISION TABLE FOR SELECTING A CONTRACT REMEDY A CONTRACT REMEDY1 1 PROBLEM PROBLEM Late delivery (The CO has determined that the deliverable has been or will be delivered late and that the delay is non-excusable.) OPTIONS OPTIONS Reschedule the delivery date in exchange for consideration (i.e., something of value in return from the contractor). COMMENT COMMENT Appropriate when (1) no liquidated damages clause was included in the original contract, (2) there is a reasonable probability of delivery by the new delivery date, and (3) the requiring activity can accept the new date. Appropriate when (1) progress payments are being made and (2) performance of the contract is endangered by the contractor s failure to make progress. Reduce or suspend progress payments under FAR 52.232- 16(c)(2). For advance payments, see FAR 52.232.12(k). 1The COR/COTR Answer Book, Third Edition Bob Boyd, CFCM 26

DECISION TABLE FOR SELECTING DECISION TABLE FOR SELECTING A CONTRACT REMEDY A CONTRACT REMEDY Late delivery (cont.) Accept late delivery and impose liquidated damages. Appropriate when (1) the contract provides for liquidated damages and (2) there is a reasonable probability of delivery by a date the requiring activity can accept. Appropriate when there is little probability of delivery by a date that the requiring activity can accept, or the contractor has not offered adequate consideration. Send a cure notice (ten days or more prior to the contract s delivery date) or a show cause notice (immediately upon expiration of the delivery period). 27

DECISION TABLE FOR SELECTING DECISION TABLE FOR SELECTING A CONTRACT REMEDY A CONTRACT REMEDY Accept the deliverable without consideration. Appropriate when the nonconformance is minor and obtaining consideration is not in the government s interests (see FAR 46.407(f)). The deliverable has not been accepted and does not conform to the contract s requirements. (The CO has determined that the deliverable has not been implicitly or explicitly accepted and does not conform to the contract s requirements.) Accept the deliverable in exchange for consideration. Appropriate when the requiring activity can tolerate non- conformance (see FAR 46 407(c)) 28

DECISION TABLE FOR SELECTING DECISION TABLE FOR SELECTING A CONTRACT REMEDY A CONTRACT REMEDY Accept the deliverable and invoke a warranty to have the deliverable improved to meet specifications after acceptance. Appropriate when there is an express or implied warranty and immediate acceptance will benefit the requiring activity. The deliverable has not been accepted and does not conform to the contract s requirements (cont.) Reject the deliverable and obtain correction or replacement at no cost to the government. Tell the payment office to withhold payment until an acceptable deliverable has been furnished. Appropriate when there is a reasonable expectation that a satisfactory replacement will be provided by the delivery date in the contract, or for consideration, within a reasonable time thereafter. 29

DECISION TABLE FOR SELECTING DECISION TABLE FOR SELECTING A CONTRACT REMEDY A CONTRACT REMEDY Reject the deliverable and send a cure or show cause notice. Appropriate when there is little expectation of receiving an acceptable product within a reasonable time. The deliverable has not been accepted and does not conform to the contract s requirements. (cont.) Invoke an express warranty. Appropriate if an express warranty applies. The deliverable has been accepted but does not conform to the contract s requirements (The CO has determined that the government has a reasonably strong case for revoking acceptance based on the terms and conditions of the contract.) Invoke an implied warranty Appropriate if an implied warranty applies. Demand that the deliverable be replaced or corrected or that the price be adjusted downward. Appropriate if there is a latent defect in the deliverable or if acceptance was based on fraud or gross mistake 30

DECISION TABLE FOR SELECTING DECISION TABLE FOR SELECTING A CONTRACT REMEDY A CONTRACT REMEDY Other breaches (The CO has exhausted all efforts at informal resolution of the problem.) Invoke whatever remedy (if any) is established in the applicable clause Suspend or reduce progress payments under FAR 52.232- 16(c)(2). For advance payments, see FAR 52.232.12(k). Possible solutions for contractor breaches: Liquidated damages (per FAR 52.219-16) for failing to comply with the subcontracting plan Liquidated damages and withholding for unpaid wages (under FAR 52.222-4, Contracting Work Hours and Safety Standards Act Overtime Compensation ) Cancellation, suspension, or termination of the contract (under FAR 52.222-26, Equal Opportunity ) 31

DECISION TABLE FOR SELECTING DECISION TABLE FOR SELECTING A CONTRACT REMEDY A CONTRACT REMEDY Other breaches. (The CO has exhausted all efforts at informal resolution of the problem.) (cont.) Withholding of payments and contract termination (under FAR 52.222-41, Service Contract Act of 1965, As Amended ) Suspension of contract payments, termination for default, and suspension or debasement (under FAR 52.223-6, Drug- Free Workplace ). Appropriate when the breach is of sufficient magnitude to warrant termination for default. Send a cure notice 10 days or more prior to the contract s delivery date. 32

PAYMENT PAYMENT Partial payment - based on acceptance of a particular part of contract performance Prompt payment - the government pays the contractor prior to the invoice payment date Prompt payment discount - an invoice payment reduction voluntarily offered to the government by the contractor for prompt payment that is made prior to the due date stated on the invoice 33

PERFORMANCE PERFORMANCE EVALUATION EVALUATION REPORTING REPORTING Reporting Requirements - Contractor Performance Assessment Reporting System (CPARS) Report Content Reporting Procedures: 34