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Business 501 Government Acquisition
Business 501 Government Acquisition
Assignment #2
29 April, 2013
Name
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Business 501 Government Acquisition
Types of Contracts and Performance-Based Acquisition
A contract is a type of written agreement between the two or more entities that is abide
by the law. The purpose of the contract is to fix the rights and the responsibilities of the parties
according to the agreement. There are different types of contracts that vary with respect to the
context of the agreement. A few common types of contracts are discussed as under:
Fixed Price Contracts

Cost Reimbursement Contracts

Labor/ Hour and Materials Contracts

Letter Contracts

Indefinite Delivery Contracts
In Fixed Priced Contracts the contractor needs to provide the services or perform
successfully to receive the price of the services that is decided to up front. There is the highest
level of cost and risk paid involved in this type of contracts.
Another type of contracts are cost reimbursement contract that agrees to pay all the
incurred costs of the project. The incurred costs are paid within a predetermined rate and the
contractor is allowed to act within cost standards.
Labor/ Hour and Material contracts pay contractor at a predefined fixed rate. The fixed
rate is for the rendered services and materials including an additional handling fee.
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Business 501 Government Acquisition
Letter Contracts are the type of contracts that allow the contractor to start work on the
project if the terms and conditions are not sealed yet. These types of contracts are used when
there is some sort of urgency to start the project
Indefinite Delivery Contracts comes in different types and shapes such as definite quality
contracts, indefinite quality contracts and requirements. These contracts appear on surface when
delivery or goods is urgently required.
On the other hand performance based acquisition is a type of contracting in which the
performance of the contractor is compared to desired outcome or results desired instead of the
effort out by the contract. In performance based acquisition the contractor is allowed to
implement his best practices in order to produce the desired outcomes. In government sector
performance based acquisition focus on the results and outcomes rather than the processes. In
such a scenario there is a greater possibility to meet the mission’s goals. (Acquisition, 2011)
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Pros and cons of sealed bidding contracts and negotiated contracts
There are different pros and cons of sealed bidding contracts and negotiated contracts.
Sealed bidding is more competitive as compared to negotiated contracts. In sealed bidding the
Government reward is based in the responsiveness and the responsibility of the contractor. In
past sealed bidding was preferred in government acquisitions and contracts buy negotiated
contracts are now taking place of sealed bidding gradually. Negotiatedcontracts are preferred
when bidding on the complex procurement projects and when the contractor himself determines
that negotiated contract will be better for the best interest of the government. Following are few
advantages of negotiated contracts:
Government can obtain a reasonable price by negotiations

Government can obtain the desired delivery schedule

Government can control the performance of the supplier

Cooperation of the supplier or contractor can be acquired easily

Negotiated contracts result in formation of long term relationship between contractor and
buyer
Negotiation between the contractor and the buyer can be indicated when there is a
complex and difficult project is undergoing. In negotiation risks cannot be determined accurately
and protracted production time is required for the project.
On the other hand sealed budding is used when the purchase value of currency is stable
and big enough to support high level of investment. There is much time to permit submission,
solicitation, evaluation and resolution of the bids. In most of the sealed bidding contracts rewards
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Business 501 Government Acquisition
and decisions are based on price basis. There may be occurrence of competition of more than one
bid.
Responsibilities of the contracting officer
Contracting officer is a key personal in successful selection of a contractor and
implementation of a contract. The contracting officer is responsible of evaluating the contracts
and sub contracts. The real task of contracting officer is to evaluate, monitor and document
performance of the contractor under different clauses prescribed in the contract. Key
responsibilities of a contracting officer are described as under:
Documentation on the performance of the contractor

To get the information up to which extent the contractor is following the plans defined in
the contract

To get information that contractor is involving small business, veteran business and other
sort of reliable businesses in the project

To gather the information whether the contractor is asking sub-contractors to follow the
same sub contracting plans as defined in contract

Contracting officer takes immediate notice if the contractor violates any clause written in
the contract
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Takes immediate notice if the contractor failed to achieve the desired results as explained
in the contract
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Takes immediate notice if the contractor is failing to operate in good faith with the sub
contractors
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Business 501 Government Acquisition

Takes notice whether the performance demanded in the contract is shown by the
contractor or not
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Whether all the goals required in the contract are met or not
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Is there any indication of absence of good faith If the goals are not met properly

Before giving the reward to contractor contracting officer is bound to obtain an
authorization

All the requirements and guidance should be compiled by the contracting officer before
issuing reward to contractor. (School, 2010)
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Business 501 Government Acquisition
Requirements for performance-based acquisitions
In order to design a successful and mature performance based acquisition a number of
requirements should be met. The first step towards establishing a performance acquisition is to
establish an integrated solution teams. While developing an integrated solution team keep in
mind the following parameters

Try to involve the support and involvement of senior management

Try to implement multi level expertise

Clearly define roles and responsibilities
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Empower your team members

Clearly analyze the scope and requirements of the project
The next step in performance based acquisition is to address the problem that needs the
immediate solution. In this step you should look for the following things

Link the acquisition to goals and objectives of your mission and performance

Define and explain the desired results you expect from contractor

Describe the constitution of success

Determine the current and the desired level of performance
The next step in requiring a performance based acquisition is to compare available solutions in
public and private sector. Following steps should be taken in this regard

Conduct a market research to find the public and private sector solutions

Spend some time to learn from the public sector counter parts

Before structuring your acquisition try to talk with private sector companies as well
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Business 501 Government Acquisition

Look and search for the existing contracts

Document your market research to make a record
The next step is to develop a Performance Work Statement and Statement of Objectives. The
steps involved in developing PWS and SOO are as under:Performance Work Sheet

Starts with the conducting an analysis
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Apply So What Test
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Prepare a matrix with the help of analysis
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Write the formal statement
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Ask the contractor to solve problems including labor mix
Statement of Objectives
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It describes the scope of the project
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Write the performance objectives in the statement
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Government and contractor should share these objectives
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All the constraints must be identified and addresses
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Make final checks

Maintain the perspective of project
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Business 501 Government Acquisition
The next stage is to measure the performance and manage it. The steps taken in this respect are
as under:
Identify the success determinants
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Identify commercial quality standards and rely on them
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Provide contractor with proposed metrics and QA plan
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Include contractual language
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Apply the type of the contract
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Identify and finalize the reward term
The next step is selection of right contractor
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Evaluate on the basis of past performances
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Use best evaluation and selection tools
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Assess the conflict resolving ability
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Business 501 Government Acquisition
Requirements for the vehicle purchase
The vehicle sales and purchase contract should be made carefully and must contain all the
important clauses and sub contracts. The sections that the contract must have are as under:-

Background
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Terms and Conditions
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Description of Acquired Vehicles
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Consideration
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Delivery of Acquired Vehicles and Conveyance of Title
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Representation, Warranties and Disclosures

Buyer’s Responsibilities
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Indemnification of Attorney’s fees and out of Pocket Cost
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Integration
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Severability
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Modification
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Acknowledgments
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Exclusive Jurisdictions Suit in the case of Breech
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State Law
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In Witness Where of
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Signature of Seller and Buyer
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Business 501 Government Acquisition
These conditions are generally common in most of the contracts however can be changed
according to the requirements of the buyer and the contractor. The law says that both the
contractor and buyer must be given a copy of contract each at the time of signature. A sample
contract for the purchase of vehicle can be shown as under. (Commerce, 2011)
Sample Contract
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Business 501 Government Acquisition
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Business 501 Government Acquisition
References
Acquisition, P.-b. (2011, May 23). Kevin Mcguinness. Retrieved April 23, 2013, from
http://www.summitconnects.com:
http://www.summitconnects.com/Articles_Columns/PDF_Documents/201012/Nov_Dec2010_vo
l13_i8_03.pdf
Commerce, D. o. (2011, May 9). Contract to buy a vehicle. Retrieved April 23, 2013, from
http://www.commerce.wa.gov.au:
http://www.commerce.wa.gov.au/consumerprotection/content/motor_vehicles/Dealers/Dealer%2
0operations/Contract_for_sale_of_a_vehicle.html
School, C. U. (2010, December 22). Responsibilities of the cognizant administrative contracting officer.
Retrieved April 23, 2013, from http://www.law.cornell.edu:
http://www.law.cornell.edu/cfr/text/48/19.706