Contracting

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Each page in this pathway presents a wealth of curated knowledge from acquisition policies, guides, templates, training, reports, websites, case studies, and other resources. It also provides a framework for functional experts and practitioners across DoD to contribute to the collective knowledge base. This site aggregates official DoD policies, guides, references, and more.

DoD and Service policy is indicated by a BLUE vertical line.

Directly quoted material is preceeded with a link to the Reference Source.

Contracting Strategies

Reference Source: Contracting Cone

The Contracting Cone presents the full spectrum of FAR and non-FAR based contracting solutions available for consideration.

Contracting Cone outlining the range of contract strategies.

The contracting strategies highlighted below may be particularly well-suited for acquiring defense business systems.

Commercial Items (FAR Part 12)

Reference Source: Contracting Cone – Commercial Items (FAR Part 12)

Supplies and services that meet the definition of a commercial item at FAR Part 2.1 may be acquired using the streamlined procedures set forth in FAR Part 12. Non-Developmental Item (NDI) and Commercial Off-the-Shelf (COTS) are considered subsets of commercial items.

DFARS Part 212.102(a)(iii) further expands the application of commercial item procedures to supplies and services from nontraditional defense contractors and, when appropriate, from business segments of traditional contractors that meet the definition of nontraditional defense contractor, for purposes of enhancing defense innovation and investment and encouraging nontraditional vendors to do business with the government. A commercial item determination is not required when commercial item procedures are applied to procure supplies and services from nontraditional defense contractors, nor does applying commercial item procedures for such procurements mean an item is commercial.

As defined in 10 U.S.C. § 2302(9), a non-traditional defense contractor is an entity that is not currently performing and has not performed, for at least the one-year period preceding the solicitation of sources by the DoD for the procurement or transaction, any contract or subcontract for the DoD that is subject to full coverage under the cost accounting standards (CAS).

Many entities will find they qualify as nontraditional defense contractors because:

  • They are a small business exempt from CAS requirements
  • They exclusively perform contracts under commercial procedures
  • They exclusively perform under firm-fixed-price (FFP) contracts with adequate price competition
  • They performed less than $50 million in CAS covered efforts during the preceding cost accounting period

Restrictions

  • Commercial item determination required
  • Contract types limited to Firm-Fixed-Price (FFP), Fixed-Price with Economic Price Adjustment (FPEPA), and Time-and-Materials (T&M) (for services

See additional references and resources for this strategy in the Contracting Cone – Commercial Items.

Contracting by Negotiation (FAR Part 15)

Reference Source: Contracting Cone – Contracting by Negotiation (FAR Part 15)

FAR Part 15 describes the procedures for competitive and non-competitive open market acquisitions exceeding the Simplified Acquisition Threshold (SAT).  Open market is defined as products or services not available from required sources of supply, such as GSA schedule contracts, outlined in FAR Part 8.

 

Restrictions

  • Requirement not met through FAR Part 8 Federal Supply Schedules or existing contract vehicle

See additional references and resources for this strategy in the Contracting Cone – Contracting by Negotiation.

IDIQ/MAC/GWAC Contracts (FAR Part 16.5)

Reference Source: Contracting Cone – IDIQ (FAR Part 16.5)

IDIQ contracts provide a method to order from existing agency indefinite-delivery contracts as well as contracts awarded by another agency (i.e. Government-wide Acquisition Contracts (GWAC) and Multi-Agency Contracts (MAC)).

Restrictions

  • Scope determination required (work, period of performance, and ceiling)
  • Fair opportunity required for a delivery-order or task-order exceeding micro-purchase threshold unless one of the following statutory exceptions applies:
    • The agency need for the supplies or services is so urgent that providing a fair opportunity would result in unacceptable delays
    • Only one awardee is capable of providing the supplies or services required at the level of quality required because the supplies or services ordered are unique or highly specialized
    • The order must be issued on a sole-source basis in the interest of economy and efficiency because it is a logical follow-on to an order already issued under the contract, provided that all awardees were given a fair opportunity to be considered for the original order
    • It is necessary to place an order to satisfy a minimum guarantee
    • For orders exceeding the simplified acquisition threshold, a statute expressly authorizes or requires that the purchase be made from a specified source
    • In accordance with section 1331 of Public Law 111-240 (15 U.S.C. §644(r)), contracting officers may, at their discretion, set aside orders for any of the small business concerns identified in FAR Part 19.000(a)(3). When setting aside orders for small business concerns, the specific small business program eligibility requirements identified in FAR Part 19 apply.

See additional references and resources for this strategy in the Contracting Cone – IDIQ.

Prototype Other Transactions

Reference Source: Contracting Cone – Prototype OTs

Prototype OTs are appropriate for research and development and prototyping activities to enhance mission effectiveness of military personnel and supporting platforms, systems, components, or materials. Prototype OTs may be used to acquire a reasonable number of prototypes to test in the field before making a decision to purchase in quantity. Prototype OTs provide a streamlined path to award a non-competitive follow-on Production OT or FAR contract.

For OTs, a “prototype project” is defined as a prototype project addressing a proof of concept, model, reverse engineering to address obsolescence, pilot, novel application of commercial technologies for defense purposes, agile development activity, creation,  design, development, demonstration of technical or operational utility, or combinations of the foregoing. A process, including a business process,may be the subject of a prototype project.

 

Prototype OT Award Criteria

One of the following must be met to award a Prototype OT:

  • At least one non-traditional defense contractor* participates to significant extent or
  • All significant participants are small or non-traditional defense contractors or
  • One third of total cost provided by sources other than gov (if no non-traditional defense contractor participation) or
  • Agency Senior Procurement Executive determines circumstances justify use of a transaction that provides for
    • Innovative business arrangements not feasible or appropriate under a contract
    • Opportunity to expand defense supply base not practical or feasible under a contract

*As defined in 10 U.S.C. § 2302(9), a non-traditional defense contractor is an entity that is not currently performing and has not performed, for at least one-year period preceding the solicitation of sources for the other transaction, any contract or subcontract for the DoD that is subject to full coverage under the cost accounting standards (CAS).

 

Competition

Although the Competition in Contracting Act (CICA) is not applicable to OTs, competition should be pursued to the maximum extent practicable to incentivize high quality and competitive pricing. Additionally, competitive procedures are required in order to leverage the authority for transition to follow-on production contracts or transactions without subsequent competition.

 

Follow-on Production Criteria

The following conditions must be met in order to award a non-competitive follow-on Production OT or FAR contract:

  • Competitive procedures were used to award the Prototype OT, and
  • The prototype project in the transaction was “successfully completed”

“Successful completion” of a prototype project requires written determination of the responsible approving official stating the efforts under a Prototype OT:

(1) Met the key technical goals of a project;
(2) Satisfied success metrics incorporated into the Prototype OT; or
(3) Accomplished a particularly favorable or unexpected result that justifies the transition to production

Successful completion can occur prior to the conclusion of a prototype project to allow the government to transition any aspect of the prototype project determined to provide utility into production, while other aspects of the prototype project have yet to be completed. Prototype OTs shall contain a provision that sets forth the conditions for the prototype agreement to be successfully completed.

Additionally, the government shall include notice of the possibility of a follow-on production award in both the Prototype OT solicitation and the Prototype OT agreement. 

 

Restrictions

  • FAR/DFARS are not applicable
  • Contracting Officer must have Agreement Officer authority to execute OTs
  • Cost sharing requirements apply if no significant participation by non-traditional defense contractors
  • Limited to requirements that have a prototyping element
  • OTs can only deliver limited quantities of prototypes
  • Prototype project must address anticipated follow-on activities, competitive procedures must be used to award prototype project, and successful completion of prototype project required to transition to follow-production vehicle
  • May not exceed $500M without USD R&E or USD A&S approval

 

See additional references and resources for this strategy in the Contracting Cone – Prototype OTs.