Contracts & Legal

Contracts & Legal Overview

Contracting in the DoD is developing and managing an agreement between two or more parties following the legal guidelines set forth by the Federal Acquisition Regulations (FAR). The FAR is the primary regulation for use by all Federal Executive agencies in their acquisition of supplies and services with Appropriated Funds. The Defense Federal Acquisition Regulations Supplement (DFARS) is a subset of the FAR developed specifically for the DoD.

The Procuring Contracting Officer (PCO) is responsible for the solicit offers, negotiation, development, award, oversight, modifications, and closeout of any contract that is entered into on behalf of the government for their organization. They work closely with legal to make sure all contracts and agreements adhere to all federal and DoD policy and regulations and contain all Contract Essential Elements. They also work closely with the Program Manager (PM) when developing Request for Proposals (RFP), Statement of Work (SOW), and executing Source Selections. Only the PCO acting within their delegated authority is empowered to execute a contract on behalf of the Government.

There is generally two (2) type of contracts (Fixed Price and Cost Plus) that are used by the DoD along with Ordering Instruments. These contracts dictate the degree and timing of the responsibility assumed by the contractor for the costs of performance and the amount of the profit incentive offered to the contractor for achieving or exceeding specified standards or goals. The normal types of contracts entered into are:

  1. Firm Fixed Price
  2. Cost Reimbursable (Cost Plus)
  3. Indefinite Delivery
  4. Incentive
  5. Time and Material

The contracting process involves all activities associated with identifying and justifying a mission need, formulating an Acquisition Strategy and Acquisition Plan (with the Program Manager (PM)) to meet this need, and implementing the strategy by means of a contract with the private sector. The contracting process has five phases: [1]

  1. Planning of a procurement
  2. Solicitation
  3. Evaluation of offers
  4. Award of a contract, and
  5. Post-award management of that contract

Contracting involves many tasks and activities. All these tasks and activities have to conform to the standards set by the FAR, DFARS, DoD policy, Milestone Decision Authority (MDA), and local guidance. A number of the main tasks and activities in the contracting process are:

Contracting has to consider Small Business utilization in accordance with guidance provided in FAR Part 19 and DFARS Part 219, Small Business Programs. It is the policy of the United States that small business, Veteran-Owned Small Business, Service-Disabled Veteran-Owned Small Business, Historically Underutilized Business Zone Small Business, Small Disadvantaged Business (SDB), and Women-Owned Small Business concerns shall have the maximum practicable opportunity to participate in the performance of contracts and subcontracts according to the Small Business Act.

The Defense Contract Management Agency (DCMA) performs contract oversight for the DoD and ensures that all DoD, Federal, and allied government supplies and services are delivered on time, at projected cost, and meet all performance requirements set forth in a contract. It provides Systems Engineering, Auditing, Earn Value Management, and Quality Assurance oversight of DoD contractors. The PCO must work with DCMA in order to successfully monitor and execute a contract.

AcqLinks and References:

Updated: 5/4/2021

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