Transcript Document

KEEP THE END IN MIND
AT THE BEGINNING
Contract Management, Administration and Compliance
VAGP 2012 Spring Conference
Francine C. Barnes
Toya Peterson
March 22-23, 012
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KEEP THE END IN MIND AT THE
BEGINNING
Course Objectives
• Contract Process
• Contract Management
• Contract Administration
• Contract Compliance
• Provide tips and strategies to prepare
effective contracts
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CONTRACTING PROCESS
Objectives of the Contracting Process
To obtain goods and services within the budgeted
cost in accordance with the project schedule and
the contract performance requirements and/or
specifications
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CONTRACTING PROCESS
PROCUREMENT
PLANNING
SOLICITATION
PLANNING
SOLICITATION
CONTRACT
ADMINISTRATION
SOURCE
SELECTION
CONTRACT
CLOSE OUT
or
TERMINATION
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CONTRACTING PROCESS



Procurement Planning
Determining what to procure and when
Solicitation Planning
Documenting product requirements and
identifying potential sources
Solicitation
Develop and issue invitation for bids or
request for proposals
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CONTRACTING PROCESS

Source Selection
Award solicitation in accordance with award clause

Contract Administration
Manage the contractual relationship with the
contractor

Contract Close Out or Termination
Completion and settlement of the contract including
resolution of any open item
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CONTRACT MANAGEMENT
Definition of Contract Management

The art and science of managing a contractual
agreement throughout the contracting process
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RESULTS OF NEGLECTED
CONTRACT MANAGEMENT
• End user frustration because of poor
contract performance in timeliness & quality
• Lack of contractor accountability
• Agency acceptance of poor quality
• Increased costs; and
• Under or overpayment to a contractor
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Contract Administrators
and
Contract Monitors
End User
or Contract
Owner
Contract Management
Team
Contract Officer
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ROLES AND RESPONSIBILITIES
Owner of the contract

Overall responsibility for meeting project and contract
objectives
 Cost
 Schedule
 Performance
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ROLES AND RESPONSIBILITIES
Contract Officer

Responsible for providing procurement
support throughout the contracting process

Authority comes from the Virginia Public
Procurement Act
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ROLES AND RESPONSIBILITIES
Contract Officer

Prepare solicitation and addendum for
posting and distribution with input from
end user

Receive and evaluate bids and proposals

Award contract
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ROLES AND RESPONSIBILITIES
Contract Officer


Communicate duties & responsibilities to the
Contract Administrator
Mediates with contractor and Contract
Administrator if performance is
unsatisfactory
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ROLES AND RESPONSIBILITIES
Contract Officer
is the only one
Authorized to make binding changes and
modifications to a contract
(including exercising contract renewal
options)
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ROLES AND RESPONSIBILITIES
Contract Administrator
Manages the contractual relationship
with the contractor in accordance with
the contract specifications, scope of
work and performance requirements
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ROLES AND RESPONSIBILITIES
Contract Administrator

Review the contract award package upon receipt

Retain a file copy of contract

Distribute contract copy to Contract Monitor


Coordinate delivery of goods and services in accordance
with contract
Verify receipt and condition of goods and services
immediately
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ROLES AND RESPONSIBILITIES
Contract Administrator




Contact Contract Officer for ANY changes or
modifications to contract
Report contractor’s persistent/serious service delivery
failures to Contract Officer
Review invoices for accuracy, approve partial or full
payments, & pay promptly
Track payments against contract progress
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ROLES AND RESPONSIBILITIES
Contract Administrator




Ensure expenditures do not exceed the total contract
cost
Maintain an open line of communication with the
Contract Officer and the Contractor
Communicate need for contract renewal to Contract
Officer
Provide input in development of future solicitations 18
ROLES AND RESPONSIBILITIES
Contract Monitor

Understand specific tasks of contract requirements

Review contract award package and receive clear direction from
Contract Administrator

Schedule the delivery of goods and performance of services with
contractor

Timely inspect the condition of goods received and quality of
work performed

Document and report the contractor’s failures to the Contract
Administrator

Provide input in development of future solicitations
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CONTRACT ADMINISTRATOR
CONTRACT START-UP DUTIES
 Review designation letter
 Sign and return to Contract Officer
 Identify contract requirements
 Identify and consult with contract team members
 Communicate roles and responsibilities
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CONTRACT ADMINISTRATOR
CONTRACT START-UP DUTIES



Conduct
implementation
meeting
Coordinate other
start-up activities as
needed
Create a file/binder
to retain all contract
information
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CONTRACT MANAGEMENT TEAM
A Successful Team

Has effective communication

Defined project expectations

Accountability of all team members

Dedication from contract management team
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MEASUREMENT OF TEAMS SUCCESS

Solicitations effectively convey requirements

Early involvement to resolve contract issues

No merit to protest and claims received

Contractor performance tracked through
proper documentation

Expenditures within budget
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GUIDING PRINCIPLES OF CONFLICT RESOLUTION
• Think Before Reacting
• Listen Actively
• Assure a Fair Process
• Attack the Problem
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GUIDING PRINCIPLES OF CONTRACT RESOLUTION
• Accept Responsibility
• Use Direct Communication
• Look for Interest
• Focus on the Future
• Options for Mutual Gain
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IDENTIFYING CONTRACT RISKS
•
•
Eliminate the possibility of
differing interpretations of the
intent of contract
Avoid using ambiguous phrases
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TYPES OF CONTRACT RISKS
•
•
•
•
•
•
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Proposal
Surety and Liability
Contractual
Schedule
Performance
Price
SAMPLE AMBIGUOUS PHRASES




The repair is to be warranted for a minimum of
12 months.
The trailer to be furnished to conform to the
latest specifications.
Equipment is to be delivered to the Main
Headquarters.
Any exceptions to these specifications must be
listed in a letter attached to this bid.
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SAMPLE UNAMBIGUOUS PHRASES
 All
repairs shall be warranted for a
minimum of 12 months from date repair is
accepted by the department.
 The
trailer must conform to Section 110 of
the 2008 Edition of the National
Equipment Motor Co publication or latest
specifications.
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SAMPLE UNAMBIGUOUS PHRASES
 Equipment
must be delivered to
Main Headquarters, 111 E Main
Street, Richmond, VA on or before
March 1, 2012.
 There
can be no exceptions….this
is a mandatory requirement of an
IFB.
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ETHICS & CONTRACT ADMINISTRATION
As government procurementrelated employees we are all
responsible to perform all duties
on an ethically manner.
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Ethics & Contract Administration
THE CODE OF VIRGINIA PROCUREMENT RELATED LAWS
1. CODE OF VIRGINIA 2.2-4370
DISCLOSURE OF SUBSEQUENT EMPLOYMENT
2. CODE OF VIRGINIA 2.2-4371. A
SOLICITATION OR ACCEPTANCE OF GIFTS
3. CODE OF VIRGINIA 2.2-4371. B
GIFTS BY BIDDERS, OFFERORS, CONTRACTORS OR
SUBCONTRACTORS
4. CODE OF VIRGINIA 2.2-4372
KICKBACKS
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ETHICS IN CONTRACT ADMINISTRATION
Your Ethical Performance May Also Touch:
• Immediate Family Members – spouse, children, parents,
brothers, sisters, and any other person living in the same
household as the employee lives
• Official Responsibility – anyone having the administration or
operating authority, whether intermediate of final to initiate,
approve, disapprove or otherwise affect a procurement
transaction or any claim resulting there from
• Procurement Transaction – all functions that pertain to the
obtaining of any goods, services or construction, including the
description of requirements, selection and solicitation of
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sources, preparation and award, and all phrases of contract
administration
CODE OF VIRGINIA 2.2-4377
Penalty for Violation
Any person convicted of a willful violation of
any provision of this article shall be guilty of
Class 1 misdemeanor.
Upon conviction, any public employee, in
addition to any other fine or penalty
provided by law, shall forfeit his
employment.
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SAMPLE ETHICS VIOLATION
A contract administrator of a landscaping
contract has a daughter that is on the youth
softball team. The coach is the contractor
awarded the landscaping contract. The
contract administrator was collecting
donations to raise money for the youth
softball team to go Disney World. The
contractor donated $2,000 to the youth
softball team.
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SAMPLE ETHICS VIOLATION
The same contract administrator needed to
purchase a television and a DVD player for
the conference room at the local office. The
contractor of the landscaping contract was
contacted to provide the television and DVD
player. The contractor purchased the items
from Best Buy for $2,100 and provided the
items to the agency for $2,800.
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SAMPLE VENDOR REQUIREMENT
A qualified firm that is approved, authorized or
licensed by roofing system manufacturer’s product
and that is eligible to receive manufacturer’s
warranty if the repair components were being
placed as a new roofing system.
Installer Certificates: Signed by roofing system
manufacturer certifying that Installer is
approved, authorized, or licensed by manufacturer
to install similar EPDM roofing systems.
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From: Your Manager’s Manager
Sent: Tuesday, April 17, 2007 10:06 AM
To: Mr. Well Established Contract Administrator P.E.
Cc: Your Boss
Subject: Coe Trailer Issue
Mr. Well Established Contract Administrator P.E.–
Senator Frank Wagner called me regarding a dispute the district is in
with Coe Co from Virginia Beach. His understanding is that Mr. Coe’s
company manufactured a trailer for us, we paid for it and then it fell
apart. We asked Mr. Coe to repair and he did not do this so we have
called the bond.
Mr. Coe has stated to the Senator that we overloaded the trailer and
that is what broke it.
Can you give me background on this please. The Senator is also
sending me some information.
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VDOT EQ ID R08601 – 16 Ton Tilt-Bed Trailer
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Trailer loaded with 30,486 Lb. Front End Loader
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Trailer Bowing under weight of 30,486 Lb. load
Level
across
center
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Extent of bowing
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(1 ½” X 4”) tubing, spaced at 24” center, is too small to handle 16 ton load limit.
Insufficient welds
throughout trailer
(incomplete and
without
penetration)
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Insufficient tubing is not supporting the decking
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When tilted for loading\unloading, the side channel is digging into the tire
sidewall. The channel has bowed as far as to the top of the rim.
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There are plates welded between the frame and the hinge
pins that are not completely welded and are without proper
penetration of the weld. This is ALL that holds the bed to
the frame! (shown on opposite side in next photo)
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The hinge pin is not secure in the hinges. It has slid three inches to one
side against the frame.
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Tubing that the cushioning cylinder is attached to is not
welded completely.
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16-Ton Tilt-Bed Trailer Specification
General: The 16-ton tilt-bed trailer shall conform to the following
specifications.
•Delivery: Unit must be delivered and accepted before June
15, 2006. VDOT reserves the right to reject any unit delivered
after June 15, 2006.
Capacity: Trailer must be capable of hauling a 32,000 lb., load
at 50 miles per hour.
Platform: The tilting platform shall be 8’ wide and not less than 20’
long with 7” fold-down approach plate. Overall length of trailer is to
be approximately 25’. The rear of the platform must tilt all the way to
the ground and permit loading of equipment without use of skids.
Steel side channels to be approximately 8” deep. Deck is to be 2” oak.
Platform lock is to be horizontal type. Lock must adjust itself for wear
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and hold tilt platform tight and rattle free. To have minimum of three
lashing rings per side. To have single platform cushioning cylinder.
16-TON TILT-BED TRAILER
SPECIFICATION
Hitch: Towing eye is to be standard 3” inside diameter and
full adjustable. An adjustable screw type tongue stand is to
be supplied. Tongue must be equipped with a pair of ½”
Grade 30 safety chains complete with grab hook with safety
lock.
Suspension: The trailer shall be equipped with spring
suspension and two 16,000 lb., tandem axles with a total of
eight wheels in a tandem arrangement. Axle spacing to be
not less than 44”. Radial tires are to be correct for trailer
GVW. Spoke or disc wheels to be furnished. To have wheel
oil seals.
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16-TON TILT-BED TRAILER
SPECIFICATION
Electrical System: Dual stop and taillights, side marker lights,
license plate light, and turn signals to be supplied. Amber reflectors
front and red reflectors rear and sides are required. Sealed modular
wiring harness with rubber grommet mounted seal beam lights to be
furnished.
Miscellaneous: Trailer to weigh approximately 7,000 lbs. A
license plate bracket is to be supplied.
Warranty: The trailer is to be warranted for a minimum of 12
months from the date the unit is placed in service by the
Virginia Department of Transportation (VDOT). Warranty is
to include all items covered under the manufacturer’s
standard warranty. Any forms required for updating
warranty start dates are to be delivered to VDOT at the time
the units are delivered.
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16-TON TILT-BED TRAILER
SPECIFICATION
Safety: Trailer to be furnished to conform to the (National
Traffic and Motor Safety Act of 1966) Federal Motor Vehicle
Safety Standards with amendments as of date of delivery and
the Motor Vehicle Code of Virginia.
Delivery: Equipment is to be delivered to the District
Headquarter locations listed in the Request for Quote (RFQ).
Unit to be fully assembled and ready to operate before being
accepted by the Department.
Current Model: To be standard proven model of
manufacturer’s latest current production with additional
features outlined herein. Unit not to be materially modified or
augmented.
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ASK PROBING QUESTIONS
• Can two 16 ton axles haul a 32,000 lb load at 50 miles
per hour?
• Or would two 16 ton axles accommodate a trailer load,
the weight of the trailer including the trailer tongue
and the haul a total not to exceed 32,000 lbs?
• To build a trailer capable of hauling a 32,000 lb. load
and weighing approximately 7,000 lbs would require a
gross vehicle weight of 39,000 and two 19.5 ton axles?
Please provide a copy of the certificate of origin for the
referenced trailer or any other paper work delivered with the
trailer that states the trailer towing or hauling capacity.
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INFORMATION GATHERING
In May 2006, an award was made to buy a 16 ton trailer per AMD
specification dated April 6, 2006.
The Company delivered the trailer on September 22, 2006 and the
trailer is not capable of hauling a 32,000 pound load at 50 miles per
hour.
The trailer suffered structural damage when the district loaded
30,486 pounds on the trailer.
The Company stated that the trailer specified in the 16 Ton Tilt Bed
Trailer Specification dated April 6, 2006 could not be built to haul
32,000 lbs.
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TIPS FOR IMPROVING CONTRACT
MANAGEMENT, ADMINISTRATION AND
COMPLIANCE
• Avoid using ambiguous terms
• Identify risk at planning stage
• Meet with vendor community
• Establish contract management
team early
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TIPS FOR IMPROVING CONTRACT
MANAGEMENT, ADMINISTRATION AND
COMPLIANCE
• Maintain open mind when gathering
information
• Seek legal counsel input
• When documenting compliance issues
use direct quotes from solicitation or
contract to strength position
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