“SMALLTOFEDS” By Ken Larson
“For government contracting success it is vital to understand the roles, responsibilities and authorities for the principal personnel with whom the contractor must do business.”
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“PROCUREMENT CONTRACTING OFFICER
During a federal government contract proposal you will come to know the Procurement Contracting Officer (PCO) assigned to the solicitation that runs the source selection process. Prime contractors have equivalent individuals, usually called, “Subcontract Administrators” or “Subcontract Managers”. Behind the PCO is the agency source selection board made up of the end user and other experts in the government agency. In prime contractor organizations these individuals are usually knows as “Program Managers”. It is not uncommon for a different PCO to be assigned to the contract once it is awarded. The government seems to evolve specialists in the ranks of procurement officials; some specialize in solicitations and source selections while others tend to be in charge of negotiating and running contracts once the winner is determined. PCO’s also have staff assistants, cost analysts and procurement specialists who support them. These personnel may interface with you on fact finding, quality and technical matters. Procurement Contracting Officers (PCO’s) hold warrants to represent the federal government. PCO’s must have internal approval of a contract within their respective agencies before they can sign it on behalf of the agency. Only a PCO is authorized to officially commit the government. Only a subcontract administrator or manager is authorized to commit a prime contractor. DEFENSE CONTRACT MANAGEMENT AREA OFFICE (DCMAO) AND ADMINISTRATIVE CONTRACTING OFFICER (ACO) As you begin government contracting you may encounter a DCMAO site survey team interested in establishing the physical presence of a new supplier, the technical capability and the human resources to perform the prospective work and the quality of the environment in which the effort will be performed. A “Pre-award Survey of Prospective Contractor” Form is completed and becomes part of the contract file. This will hold true as well if you are a subcontractor to a prime. Select the person who will meet with the government survey team. This person should be empowered to speak for the company and should be completely familiar with details of the solicitation and of your company’s offer. If relevant, make available one or more technicians to answer questions. Identify any disparities that may exist between the solicitation and your company’s offer that should be resolved during the initial meeting with the survey team. Think about how you can demonstrate actual technical capability or the development of technical capability on the proposed contract. Make sure your plant facilities and equipment are available and operable. If they are not, be prepared to demonstrate that they can be developed or acquired in time to meet proposed contract requirements. Make sure that your labor resources have the proper skills or that personnel with the needed skills can be hired expeditiously. Gather and make available to the survey team documentation, such as previous government contracts or subcontracts or commercial orders, to demonstrate a past satisfactory performance record with regard to delivery, quality and finances. Gather financial documentation for the team financial analyst, including the company’s current profit and loss summary, balance sheet, cash flow chart and other pertinent financial information. Make sure the plans are in place for vendor supplies and materials or subcontracts to assure that the final delivery schedule can be met. Make sure that these plans are verifiable. Review any technical data and publications that may be required under the proposed contract and make sure you understand them. If the contract is a type other than a firm-fixed price or if you have requested progress payments, prepare adequate accounting documentation for review. Review your quality control program and make sure that it is workable and consistent with the quality requirements stated in the contract. For smaller contracts a PCO may delegate his authority to an Administrative Contracting Officer (ACO). This often occurs in larger industrial plants where the ACO is resident in the facility or in remote locations where the ACO is a member of the Defense Contract Management Area Office (DCMAO) in the city where the contract is being performed. ACO’s run coordinative functions in geographically dispersed offices representing the government and coordinating inspection and acceptance functions, site surveys and related matters on behalf of the PCO. As you grow into the government contracting business you will find yourself interfacing more frequently with the DCMAO ACO nearest your location on functions various PCO’s delegate or request be performed supporting contracts their agencies hold with your company. With appropriate delegation of authority from the PCO, an ACO can sign contracts and contact amendments on behalf of the government. CONTRACTING OFFICER’S TECHNICAL REPRESENTATIVE (COTR) The PCO typically has an end user for the product or service who will become the Contracting Officer’s Technical Representative (COTR) when the contract is awarded. As discussed above, the prime contractor equivalent position is a Program Manager. The COTR has a strong influence on negotiations and contract performance as well as payment approval. Your COTR is the real internal customer at the agency. He has fiscal, technical and schedule responsibilities to his management for the program you are servicing. However, he cannot sign for the government. The PCO has the agency warrant for that function and knows the most about public law and the Federal Acquisition Regulation (FAR) as it is applied to contracts the agency undertakes. It is the COTR who is likely feeding the PCO requests for fact-finding data during a proposal and it is the COTR with whom you will interface the most in terms of product acceptance or performance of services. Keep in mind that the COTR and the PCO will approve your deliveries, along with quality assurance inspectors for the government. A satisfied PCO and COTR mean expeditious billing approval and payment by the government. It can be generally stated that if the COTR is unhappy with contract technical performance the PCO will be unhappy as well. They are co-equals organizationally within an agency. A COTR has program executive management authority regarding decision making options. A PCO is a staff role with signature authority to promulgate decisions, once they have passed inter-agency legal and management reviews. There are two important aspects of dealing with a COTR: He or she is your most important government customer technically. He or she does not have the authority to commit the government on contract changes in work scope, schedule, pricing or terms and conditions. Taking contract direction from a COTR and performing outside the scope of an existing contract without official sign-off on a contract amendment by a PCO is very high risk. PURCHASING AGENTS For micro-purchases you may find yourself dealing with government personnel who are granted purchasing authority without being designated a PCO or an ACO. In most cases these officials are COTR’s and are seeking to utilize a government- wide purchasing credit card. If any doubt exists about their authority to commit the government on a transaction, it is always a good idea to ask for their PCO or ACO contact information for verification of the transaction. DEFENSE CONTRACT AUDIT AGENCY (DCAA) The Request for Proposal (RFP) to which you responded may have ordered a copy of your proposal be submitted to the Defense Contract Audit Agency DCAA Office nearest your location. If you are a new supplier to the government, DCAA may ask for a copy of your long-range plan containing your direct and indirect rate structure. They will verify the rates utilized in your proposal against your LRP, evaluate escalation factors utilized for long term projects and check the math. The auditor will ask for copies of major material and travel quotations and insure that government per diem rates are utilized for lodging and meals in the cost proposal. DCAA may also visit your facility and complete a “Pre-award Survey of Prospective Contractor Accounting System” form. The survey checks compliance with Cost Accounting Standards 401 and 402 to insure that the company sets up each new government contract on job cost accounting in the identical manner in which it was proposed; in effect identifying direct labor, direct material and other direct costs to each contract monthly and allocating overhead and G and A utilizing the same numerator and denominator relationships upon which the contract was originally estimated. DCAA is paid by PCO’s to perform audits. The audit does not extend to negotiations and at the audit conclusion the auditor files a report with the PCO. The report will contain information on any errors uncovered and findings on the adequacy of the accounting and long range planning systems. regarding prices for prospective supplies and services. If the auditor does not offer an exit interview, ask for one. Better yet, ask for a copy of the audit report to the PCO. Many DCAA offices will provide a copy to audited contractors. DCAA does not have the authority to direct a proposal revision based on audit findings. An astute contractor will immediately correct any errors found by the auditor in the DCAA will not express an opinion on the cost content of the proposal in terms of a value judgment proposal and examine other audit findings in preparation for negotiations. DCAA is also involved in rate approvals on an ongoing basis. When you elect to change your forward pricing rates DCAA will perform and audit of the reasons for the changes and inform the PCO and ACO of the results. DCAA also gets involved in auditing progress billings and incurred cost submissions in support of contract closeout documentation. GSA officials involve DCAA in auditing schedule application proposals and associated escalation factors for multiple year awards.”
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