NAF Contracting FAQ

Home
Commander
News
About FMWRC
Programs

Contract File

When I assemble the contract for award, can I simply use the original RFP – deleting Sections K, L and M – and add the contractor’s proposal?

Contract Administration

What is the standard for dollar amounts and calendar days claimed under the liquidated damages (LD) clause?

How effective is a contractor warranty as a remedy for ensuring effective contractor performance.

General Principles

What is the difference between a contract clause and a contract provision?

Can NAFIs contract for temporary personnel services?

Contract File

Question: When I assemble the contract for award, can I simply use the original RFP – deleting Sections K, L and M – and add the contractor’s proposal?

Answer: Confusion often arises as to exactly what is included in “the contract.” For that reason, we recommend you avoid the practice of simply incorporating the contractor’s proposal into the contract. Contractor proposals often contain puffery touting the value of their services. Such language is irrelevant to the duties the contractor undertakes as part of the contract and can be confusing when read in connection with the work statement. Ambiguity is a contract weakness that can lead to disputes. In order to avoid ambiguity, unnecessary language should be eliminated from the contract award documents.

Note, too, that incorporating the raw RFP into the contract often results in a contract with numerous pages stamped with an RFP number, not the contract number. This practice is sloppy, and can lead to further ambiguity that might be resolved against the NAFI.

One way to avoid the problem of contract documents with RFP numbers is to use SNACS, the automated procurement system. SNACS allows for the creation of a new contract document from the solicitation. Creating a new document permits the contracting officer to (1) place the contract number on all pages of the contract, (2) add any appropriate language, such as negotiation changes, (3) attach a list the documents you have decided to incorporate by reference, (4) attach documents from the offeror’s proposal, (5) establish an order of precedence (see below for more info) and (6) sequentially paginate the contract document. You should also add language specifically defining what “the contract” includes, e.g., “this contract consists of pages 1-68 and includes six additional pages of drawings at Attachment A.”

If you elect to use any part of the offeror’s proposal in the awarded contract, you should use DA Form 4071 and check either block 17 or 18, as appropriate. In addition you should give considerable thought to the Order of Precedence clause (BI-013) in Section I, to ensure that the priority of documents listed in the clause is correct and that you are protecting the NAFI’s interests under the circumstances presented by your award. If you decide that this language needs clarification, you may add language to the contract as part of language setting forth the negotiated changes addressed above. This is usually done on the page after the DA Form 4071.

Under some circumstances, you might also want to add language such as “The contract supersedes the proposal,” in order to make your intent abundantly clear.

Look at AR 215-4, Paragraph 4-18 for more information.

Contract Administration

Question: What is the standard for dollar amounts and calendar days claimed under the liquidated damages (LD) clause?

Answer: There is no “standard” for LDs. LDs are tailored to the acquisition and must represent the real (or anticipated) damages the NAFI will suffer for late performance.

LDs are not punitive or negative performance incentives.

The contract file must be documented with the rationale for determining the LD amount. (See AR 215-4, paragraph 2-20)

Question: How effective is a contractor warranty as a remedy for ensuring effective contractor performance.

Answer: Not very good, in our experience. Just requiring a contractor to provide his “most favorable commercial warranty,” as required by Clause BI-111 often doesn’t offer the NAFI much protection. For example, how do you know that the warranty offered is the contractor’s “most favorable commercial warranty?” Have you checked to what warranties he offers in the commercial marketplace? To their credit, some contracting officers do. Many, though, don’t focus at all on this important contract remedy, and fail to address the topic in their negotiations with the contractor?

Usually, warranties aren’t considered at all until a problem arises on a patent defect after acceptance and final payment. Then the contracting officer finds herself in the position of trying to induce the contractor to perform corrective work without the benefit of additional payment. Not surprisingly, these efforts are seldom successful.

Three approaches can be helpful here. (1) Make warranties a technical evaluation item, basing contract award, in part, on (a) a well thought out contractor proposal for warranty calls and (b) a history of good past performance in answering warranty calls; (2) promptly notify the contractor of deficiencies covered by the warranty clause as soon as you discover them; and, finally (3) document a contractor’s response to written warranty calls in the contract file.

Naturally, the solicitation should plainly advise offerors up front (before award) of our interest in warranties. We should also plainly alert them to the consequences of poor performance, thereby deterring them from poor warranty responses.

Warranty terms and conditions are matters for negotiation. Contracting officers and requiring activities should approach this question in the same way as any other matter requiring the exercise of business judgment – bargain for the best terms available, but recognize that especially favorable terms may result in a higher price. Consider the normal life cycle of the product, its expected use, and the expected reliability and durability. In some cases, it may be more effective to buy a new product after several years of use rather than pay for an expensive warranty. In short, the length and type of warranty you bargain for should reflect a balance of the cost and benefit to the NAFI. In some cases, requesting more than the “most favorable commercial warranty” may result in an overly expensive product.

General Principles

Question: What is the difference between a contract clause and a contract provision?

Answer: Contract clauses are terms or conditions used in solicitations and contracts, and they apply both before and after award. In contrast, a solicitation provision is a term or condition used only in solicitations and applying only before contract award.

Solicitation provisions are primarily used to describe the terms and conditions of the solicitation – e.g. the evaluation of offers/or bid opening conditions. Contract clauses are placed into solicitations because these terms or conditions will apply both before and after(or just after) contract award; for example, a contracting officer may insert the clause, Option To Renew, and the provision, Evaluation of Options, into a solicitation to inform offerors of both the evaluation factors and the final contract terms. The solicitation provisions will be removed from the contract at the time of award but the contract clauses will remain. (See AR 215-4, paragraph 4-18)

Question: Can NAFIs contract for temporary personnel services?

Answer: The short answer is “yes.” But make sure you first comply with regulatory guidance on (1) personal services and (2) requisite advance approvals

First, draft the SOW around discrete tasks that the contractor must perform or performance objectives that it must meet. Write the SOW in such a way that no personal supervision is necessary by NAFI personnel. Whenever NAFI personnel regularly direct the actions of contractor employees there is always the danger of creating an “employer-employee” relationship that runs afoul of the prohibition on contracting for personal services. (See AR 215-4, paragraph 7-7d)

Second, before contracting for temporary services the requiring activity must obtain Garrison Commander approval. No blanket approvals can be granted. Instead, the GC must consider each request on a case by case basis. AR 215-3, paragraph 2-13.

Here’s another practical tip. Since requirements for temporary labor may require quick turn around times, contracting officers may want to award an IDIQ contract to make ordering temporary help easy once Garrison Commander approval is received.

[Return to NAF Contracting}