Subject: Requirements for Service Contracts.OFFICE OF THE UNDER SECRETARY OF DEFENSE 3000 DEFENSE PENTAGON WASHINGTON, D.C. 20301-3000 September 13, 2004 MEMORANDUM FOR DEPUTY ASSISTANT SECRETARY OF THE ARMY (POLICY AND PROCUREMENT), ASA Asa (ā`sə), in the Bible, king of Judah, son and successor of Abijah. He was a good king, zealous in his extirpation of idols. When Baasha of Israel took Ramah (a few miles N of Jerusalem), Asa bought the help of Benhadad of Damascus and (ALT) DEPUTY ASSISTANT SECRETARY OF THE NAVY Assistant Secretary of the Navy (abbrev. "ASN") is the title given to certain senior officials in the U.S. Department of the Navy. They serve as chief assistants to the Secretary of the Navy (SECNAV). (ACQUISITION MANAGEMENT), ASN (1) (Autonomous System Number) A unique identifier of an autonomous system on the Internet. Of the 65 thousand ASNs available, more than 30 thousand have been assigned to ISPs and NSPs. ISPs usually have only one ASN, but NSPs may have more than one. (RDA RDA abbr. recommended daily allowance Recommended Dietary Allowance (RDA) The Recommended Dietary Allowances (RDAs) are quantities of nutrients in the diet that are required to maintain good health in people. ) DEPUTY ASSISTANT SECRETARY OF THE AIR FORCE (CONTRACTING), SAF/AQC DIRECTOR, ADMINISTRATION AND MANAGEMENT DIRECTOR, ARMY CONTRACTING AGENCY DEPUTY DIRECTOR FOR LOGISTICS OPERATIONS (DLA DLA dog leukocyte antigen. ) DIRECTORS, DEFENSE AGENCIES SUBJECT: Requirements for Service Contracts [ILLUSTRATION OMITTED] Contracts for services awarded on a cost-reimbursement or time and materials labor and materials (time and materials) n. what some builders or repair people contract to provide and be paid for, rather than a fixed price or a percentage of the costs. (T & M) basis usually require significant government vigilance during contract performance to ensure the government receives good value. This memorandum provides guidance on the assignment of contracting officer representatives, as well as the need for revisiting the contract type before reissuing such contracts. The need for this guidance was specified in a recent Department of Defense Inspector General review on "Contracts for Professional, Administrative, and Management Support Services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other services " (DoDIG Report D-2004-015, October 30, 2003). You should consider the need for increased vigilance and government oversight during the acquisition planning phase of contracts for services that are planned to be issued on a cost-reimbursement or T & M basis. To assist with contract oversight on such contracts, you should appoint contracting officer representatives (COR). Any such appointments must be done in writing in accordance with Defense Federal Acquisition Regulation Supplement (DFARS DFARS Defense Federal Acquisition Regulation Supplement DFARS DoD Federal Acquisition Regulation Supplement ) 201.602-2. Some specific tasks for CORs on T & M contracts would be to verify the appropriateness of the categories of labor used, and the reasonableness of the number of hours worked and materials used. When personnel prepare the requirements for a follow-on contract to an existing cost-reimbursement or T & M contract for services, they should work with the contracting officer to determine if any portion can be broken out and ordered on a fixed-price basis. The experience gained on the prior contract may serve as a basis to reasonably price similar future efforts on a fixed price basis. Finally, there is a statutory preference for the use of performance based specifications, which clearly define desired outcomes, as an additional step that facilitates using fixed-price contracts. Fixed-price contracts result in significant cost savings and efficiencies for the Department, including the need for less oversight. If you have any questions on this matter, please contact Mr. William C. Timperley at william.timperley@osd.mil, telephone (703) 697-8336. Deidre A. Lee Director, Defense Procurement and Acquisition Policy |
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