Contracting and Purchasing: Solicitations and Award

Contracting and Purchasing: Solicitations and Award

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SOLICITATIONS AND AWARD

INTRODUCTION

Although the terms Purchasing and Contracting can be used interchangeably, it is not un-common for Tribes with diversified enterprises, when acting as a Buyer, to normally refer to the department or organization that is authorized to make purchases for the Tribe or Tribal Enterprises, as the Purchasing Department. In the situation where the Tribe acts in the capacity of the Seller or Contractor, it is then common to refer to the department or organization that deals with the Tribe’s customers as the Contracting Department.

PRIME CONTRACTORS AND SUBCONTRACTORS:

Generally speaking the terms “Prime Contractors” and “Subcontractors” evolved from the Federal Government’s Federal Acquisition Regulations, “FAR”, in which the Seller of goods or services to the Federal government is commonly referred to as the “Prime Contractor” or “Contractor”.

If the Tribe, as the “Prime Contractor” or “Contractor”, decides to enter into a contract or purchase order with some other entity to perform part of their agreed to contract with the Federal Government, this other entity, “Supplier”, is then referred to as a “Sub-Contractor”, by the Federal Government and can be referred to as a “contractor”, “subcontractor” or “supplier” by the Tribe. Consequently, wherever these terms are used in this manual, unless the term “Prime Contractor” is used, we are referring to the entity the Tribe has contracted with. Additionally, the contract, purchase order or agreement that the Tribe, as the Primary Contractor, entered into with the other entity to fulfill the Tribe’s obligations/commitments under the Federal Prime Contract, is known as a “Sub-Contract”, i.e., a subordinate contract to the Tribe’s primary contract. The supplier performing under that “Sub-Contract” is known as the Tribe’s subcontractor.

Most often, in the commercial environment where the Tribe is procuring items solely for the use of the Tribe and Tribal Enterprises, the organization that purchases these maintenance, repair and operating requirements is commonly referred to as the Purchasing or Materiel Organization. The agreements entered into to purchase the required goods or services can be commonly referred to as: Purchase Orders, Contracts, Master Agreements, Agreements, etc., based on that organization’s Policies and Procedures as dictated by the Tribal Government.

This chapter describes the activities involved in preparing: Invitations for Bid, “IFB’s”, Requests for Proposal, “RFP’s”, and Requests for Quotation, “RFQ’s”, for the various types of contracts discussed herein both on a Federally funded basis and on a Tribally funded basis.

In preparing any solicitation, whether it is a, “IFB”, a “RFP” or a “RFQ”, remember, these documents should contain the Terms and Conditions that you intend to incorporate into the final Contract or Purchase Order. If the Tribe’s contact with the Federal Government has clauses relating to quantity, quality, schedules, performance and delivery of products and/or reports or other materials and the Tribe chooses to sub-contract these items, the Tribe must flow down these clauses to their contractors or suppliers. The Federal Government holds the Tribe as solely responsible for performance under the Primary (Prime) contract. The Tribe must therefore limit their liability by “flowing down” certain clauses to their subcontractors or suppliers.

PURCHASE REQUEST/REQUISITION REVIEW

The Purchase Request/Requisition, (POR), establishes the authority to initiate the contracting/purchasing process because it transmits funding authority and signifies the validity of the requirement. The Contracting Officer or the authorized Tribal Purchasing Representative must review the Purchase Request/Requisition to ensure that the requirement has: (i) been approved by the necessary authority, (ii). that funds are available and; (iii) that funds have been properly appropriated. Because the Purchase Request/Requisition is used as a transmittal document, it should include information which is pertinent to the development of the solicitation, but which has not been included in the attached specifications or drawings. For example, the Purchase Request must, at a minimum include:

• Tribal Logo, Date, and Name of Authorized Requestor
• Accounting Information to ensure that the proper fund is being utilized
• Quantity and Delivery Requirements
• Any unique information pertinent to the request
• Specifications or Drawing

It may also include recommendations on the use of special clauses, recommended liquidated damages, prospective sources, etc.

SCREENING FOR SMALL AND DISADVANTAGED BUSINESS OPPORTUNITIES:

In accordance with the Federal Acquisition Regulations “FAR”, the Contracting Officer or the authorized Tribal Contracting/Purchasing Representative, upon receipt of the Purchase Request/Requisition, when utilizing Federal Government funding or in accordance with established Tribal Policies, must ensure that proper consideration has been given to the use of Small Businesses and Small Businesses owned and controlled by socially and economically disadvantaged individuals. Since the selection of the method of contracting can have an impact upon the structure of the specification as well as the solicitation.

It must be noted that Purchase Orders/Contracts entered into under P.L. 93-638 are subject to somewhat different standards as section 7(b) of the Act requires preference in subcontracting opportunities be given to Indian owned economic enterprises (51% Indian owned) or to Indian organizations. Therefore, all contracts entered into under the Act must take this into consideration, in addition to the other requirements for Small Businesses and Small Businesses owned and controlled by socially and economically disadvantaged individuals.

CONSTRUCTION, REPAIR AND ALTERATIONS CONTRACT REQUIREMENTS:

Construction, Repair and Alterations Contract Requirements under FAR, may include a requirement for a “Pre-solicitation” Notice and other unique requirements as discussed herein.

ISSUING THE IFB/RFP AND RFQ:

In the case of construction contracts, the Federal Government’s contracting office should maintain active bidders’ mailing lists which reflect the capabilities and capacities of construction firms. The Government contracting office should be prepared to furnish copies of these lists to Indian Tribal contractors when a P.L. 93-638 contract is involved. The lists are established by the maintenance of a record of responses received on past proposed contracts and, if necessary, through the use of the Commerce Business Daily long-range acquisition estimates announcements (see FAR 5.404).

A “core” list is made up of firms responding to the CBD announcements, who have expressed an interest in a specific program or project, plus firms with known capabilities in the particular area of experience required for the given project.

Invitations for Bids (IFB’s) should be distributed to all interested bidders who responded to the CBD announcement and who are not listed in a debarment or suspension, or ineligible status, and to any other firms or individuals who are on the bidders list established for the acquisition. In addition, copies of the IFB may be distributed free of charge to other offices and agencies of the Government for informational purposes. Contracting Officers may determine the geographical extent of distribution of advance notices and solicitations on a case-by-case basis (FAR 36.221). As mentioned earlier, the IFB should not be issued until 15 days after the synopsis was published in the CBD. Bidders also must be allowed at least 30 days to respond.

Other methods of establishing lists of potential suppliers/contractors/sub-contractors/vendors include the use of past procurement data, source catalogs (such as The Thomas Register), sources acquired by use of the Internet, or other sources as dictated by existing Policies and Procedures.

In most cases, in the commercial contracting/purchasing environment, the document most utilized to solicit quotations is referred to as the RFQ. Regardless of which format is utilized, i.e.: IFB, RFB, RFQ, after the need to procure has been established by the authorized personnel, and a purchase requisition has been generated, the following information, at a minimum, must be included in the solicitation documents:

A Statement of Work, (SOW) which clearly, accurately, concisely and completelyanswers,at a minimum, the following questions:

1.WHAT NEEDS TO BE DONE?

a.What performance must occur and what deliverables are necessary for achievement of the Goals and Objectives of this Program, Project, Grant or Contract?

b. Are there other options that need to be included?

2.WHEN AND WHERE IS IT BEING DONE?

a. Is time of the essence?

b. Are Progress Payments a necessity?

c. Is incorporation of Performance Bonds, Payment Bonds, and/or aCritical Milestone Scheduleessential?

3.HOW SHOULD IT BE DONE?

a. What are the inherent constraints, ifany?

b. Tribal oversight, inspection or approval responsibilities?

c.Are there clause(s) and/or requirements that should be passed on (flowed down) to the contactor/supplier?

4.WILL THE TRIBE PERFORM ANY OF THE REQUIRE-MENTS?

a. How will these be coordinated to prevent impact on the Subcontractor’s/Supplier’srequired performance and/or schedule?

b.How will these be defined and audited?

5.WHAT SHOULD THE FINAL OUTPUT BE?

a.Is a formal Acceptance Plan required?

b.What is the formal Acceptance Criteria?

c.Are there operational/functional tests that should be included?

6.WHAT ARE THE REQUIRED DELIVERABLES?

a.Software – Multiple licenses, User Manuals, Programmer Manuals, Updates or?

b.Hardware – Compatibility Requirements, Quality, Size or?

c.Reports – Format, Content, Frequency, etc?

d.Manuals –Type, (Operation & Maintenance) and Quantity?

e.Delivery Schedule required?

7.WARRANTY CONSIDERATIONS?

a.Type of Warranty

b.Length of Warranty?

c.Parts and Labor coverage or?

d.Reliability guarantees?

8.IS TRAINING A REQUIREMENT?

a.Hands-on training required?

b.When must it occur?

c.Is it a continuous requirement, mandating the use of sub- contractor/supplier personnel or an on-line tutorial?

d.Length of Training?

e.Number of personnel to be trained?

f.Training to occur at on-site Tribal facilities orcontractor/supplier facilities?

g.On-going Technical Support?

9.ARE THERE CRITICAL PRODUCT OR PERFORMANCE SPECIFICATIONS?

10.ARE THERE ANY UNIQUE COMPATIBILITY REQUIREMENTS WITH EXISTIG FACILITIES, SYSTEMS, HARDWARE, SOFTWARE, ENVIRONMENT, ETC.?

11.IS THERE A CRITICAL FOOTPRINT (SIZE) OR INSTALLATION REQUIREMENT?

12.ARE THERE MODIFICATIONS TO THE EXISTING FACILITY REQUIRED THAT WOULD IMPACT THE ACQUISITION?

13.ARE THERE ANY OTHER OPTIONAL REQUIREMENTS THAT SHOULD BE CONSIDERED AND SPECIFIED?

14.ARE THE REQUIRED ALL TERMS AND CONDITIONS OF THE PRIME CONTRACT INCORPORATED?

Clauses that need to be flowed-down to thecontractor, supplier or vendor to minimize the Tribe’sliabilities and ensure generation of necessary reports or performance.

GENERAL PRINCIPLES OF PREPARING A STATEMENT OF WORK

THE IMPORTANCE OF ATTITUDE AND EFFORT

Writing a Statement of Work (SOW) is always a team effort. Even when the SOW is relatively simple and authored by a single writer, it shouldstill be reviewed, at a minimum, by a legal expert, a contract specialist, and an authorized representative from any other organization that will be “touched” by that contract. Normally, however, the preparation of a good SOW is like an intricate project requiring a great deal of research and consultation. A person who has a greater understanding of why it is important to do a good job in preparing a SOW—who realizes what is at stake—will probably be more willing to take the necessary time an exert the necessary effort.

Whether the SOW is loose or tight, simple or complex, certain general principles apply: and the following considerations are pertinent. (Remember, the most important part of the contract is that which describes what the subcontractor or supplier is supposedto do.)

• Specifity vs. generality: Care must be taken to see that the task description is sufficiently definite and specific to convey precisely what is to be done. On the other hand, a high degree of precision and detail may hamper the contractors/supplier’s inventiveness and initiative and does not serve the Tribe’s best interest. The SOW writer should use care to shape the task description in a way that is specific but, in cases where there is reliance on the contractor as the expert, is not too structured in a manner that would hinder the use of the subcontractor’s or the supplier’s expertise.

• The SOW should be neither so narrow as to restrict the contractor’s/supplier’s efforts nor so broad as to permit the contractor/supplier to explore, or undertake work in, areas having little relationship to the particular contract tasks.

• The SOW must define the contractor’s/supplier’s obligations and be definitive enough to protect both the Tribe’s and the Government’s interests.

• The ideal method may be to specify the results required and end products to be delivered, letting the contractor/supplier use the best method, in accordance with local, state, federal and Tribal, codes, rules and regulations and existing industry standards.

• Lack of a clear and common understanding of the requirement creates severe problems in arriving at realistic, sound estimates of cost and in negotiating budgets. To enhance clarity:

Use short sentences in preference to long sentences.

Use familiar words in preference to the unfamiliar.

Substitute simple words and sentences in place of the complex.

Eliminate the unnecessary words.

• Use action verbs whenever possible.

• In a contract, the obligations and rights of the parties are those that the written words of the contract express. Each element of what the contractor agrees to do and what the Tribe agrees to do must be carefully spelled out. For example, if the Tribe is to provide certain approvals, or performance of any actions which might adversely impair the contractor’s ability to perform as required, specific procedures and time limits should be established. If a requirement for necessary work is left out of the SOW, it makes no difference that the writer had meant to include the requirement. The contract means what it says, not what it was meant to say. Consider, for example a case involving a contract where the intent was to have a damaged roof-edge repaired and repainted. The SOW said “match existing” but did not specify “repaint.” The contractor/supplier matched an existing metal flashing-strip but would not repaint. The court held with the contractor/supplier.

The clarity and completeness of the standards to be used in assessing progress and compliance are critical. The contractor/supplierwill perform in compliance with the wording of the document. If that wording does not clearly state not only the standards by which performance will be judged but; also by whom, how and within what period of time, the contractor may be absolved of responsibility for inadequate performance.

A contractor, taking ultimate direction from the SOW alone, should be able to perform the required work, within the time frame specified. This means that the SOW must provide a clear, unambiguous, and complete basis for effective and efficient performance.

TECHNIQUES FOR COMMENCING STATEMENT OF WORK DEVELOPMENT

As previously stated, the first step in developing any SOW is knowing what is needed—and knowing it well. Only than can the SOW writer tackle the next most important question: “How can I best communicate what is needed?”

It is a good idea to proceed by preparing an outline of the whole. This is of special importance to work statement preparation, where completeness, internal consistency, and good organization are critical. The outline may be an elaboration of, or may subsume (consider or include as part of a more comprehensive one), a list of requirements which you have developed. It may be a terse notation of key points, presented as headings and subheadings, or it may actually constitute a first, rough draft.

Depending on the nature of the effort, the technical risk involved, and the requirements of any internal program procedures, the following may be considered for inclusion in a comprehensive working outline for the preparation of the SOW.

1.Objectives:

Precisely identify desired end objectives of the project and associated requirements.

2.Context for Project:

List background information that will aid in understanding the nature and origin of the program. Include a brief summary of objectives, program authority, major program and goals set by statute or the Tribe, if relevant. Describe the relationship of the effort to other programs and goals.

3.Scope:

Establish the scope of required efforts in support of program objectives. Clarity is essential.

At this time, you should consider what type of requirement is required, i.e.: Completion or Term:

1. A Completion Type Requirement has a need for an end item, such as:

Delivery of a final study report,

Repairs on a specified number of houses,

Delivery of a personnel system.

2. A Term-Type Requirement normally requires a certain level of labor-hours or person-days be applied to a certain function during a specified period of time,

such as:

Provision of a certain level of social or educational services,

Provision of a designated level of effort in the development and implementation of a new Tribal constitution.

In either case, the SOW must be as definitive and precise as possible. The description of the end item must be specific about the characteristics it mustpossess and the standards it must meet for acceptance. In the Term Type requirement, (level-of-effort situation) even if you do not know where the effort will lead in terms of measurable results, you must still be specific about the goalsand directions toward which the is to deploy resources during the term.

Phase-by-Phase Approach: In cases where there are many requirements, it is possible that either the end result nor the approach can be specified adequately. Inthis situation,a good approach is to write a SOW that specifies that the work is tobedone in phases by the contractor/supplier, which gives the Tribe the option of review and redirection at the end of each phase.The first phase might be defined as an “exploratory” phase, in which the contractor/supplier undertakes a literature search, does some preliminary work, or examines data to determine the feasibility ad approach. When this work is done, the contractor/supplier shall be required to submit a report that provides the basis for deciding how to handle the second phase.

4.Acceptance:

Identify milestones or Tribal management control points in the sequence of tasks where Tribal actions for review, approval, acceptance, or rejection are to be introduced. Establish relevant and well-defined baselines for performance measurement. These baselines will serve at least four purposes.

They will: