Federal Transportation Officer Training Program: Intermediate (Level 2)

Transcription

1 Page 1 of 64 Federal Transportation Officer Training Program: Intermediate (Level 2) Session 4: Transportation Contracts Page 1 of 64

2 Page 2 of 64 Session Objectives Upon completing this session given the sample cases and questions in the Knowledge Review section, you will be able to: Identify whether a contract is the best method of procuring transportation services. Identify key components of a statement of work (SOW). Identify transportation officer (TO) participation for both transportation services contracts and other contracts having transportation elements. Identify contracting officer's representative (COR) responsibilities and limits on authority. Page 2 of 64

3 Page 3 of 64 Session Outline How does a Transportation Officer Interact with a Contracting Officer? What are the Transportation Officer's Roles as a Contracting Officer's Representative (COR)? What Is a Contract? What Role Does a Bill of Lading (BOL) Relate in the Contract Process? Should an Agency Contract for Transportation Services? How Does an Agency Establish Transportation Service Contracts? Wrap Up Glossary of Terms Knowledge Review Continuing the Learning Process Page 3 of 64

4 Page 4 of 64 How Does a Transportation Officer Interact with a Contracting Officer? The interaction between the transportation officer (TO) and transportation staff with a contracting officer (CO) should not be limited to just transportation service contracts. In almost every purchase of supplies and equipment from vendors, something must be moved and delivered. The expense of moving this freight or cargo can be managed by the vendor or the agency, depending on the contract terms. It is important that transportationrelated aspects including transportation sustainability policies and practices of a purchase be considered before entering into contracts to buy. Page 4 of 64

5 Page 5 of 64 How Does a Transportation Officer Interact with a Contracting Officer? (continued) The Federal Acquistion Regulation (FAR) establishes requirements for the CO to consider these costs and consult with the TO. It also tasks the TO to support the CO in these endeavors. The following highlights these requirements: 48 CFR (2013) Policies requires the contract administration office to obtain traffic management advice and assistance in consideration of transportation factors required for solicitations and awards; contract administration, modification, and termination, and transportation of property by the government to and from contractor's plants. 48 CFR 47.3(2013) Transportation in Supply Contracts discusses the importance of considering transportation and traffic management factors in all agency acquisitions, not just those for transportation services. The transportation staff should be consulted early in the acquisition process to support development of requests for proposal and the acquisition strategy. The TO may be delegated the authority for a specific contract to serve as the COR or a contracting officer technical representative (COTR). These terms are often used interchangeably. Page 5 of 64

6 Page 6 of 64 How Does a Transportation Officer Interact with a Contracting Officer? (continued) General guidance on the responsibilities of contracting officers and transportation officers is shown in the table below. CO Responsibilities 48 CFR (2013) TO Responsibilities 48 CFR (2013) Obtain information from the TO relating to solicitations, awards, contract administration, modifications, and termination. Request TO participation prior to acquiring supplies that are large, above a certain dollar threshold, heavy, over- or outsize, dangerous or sensitive, or that can be containerized. Consider additional costs arising from factors such as the use of special equipment, excess blocking and bracing material, or circuitous routing. Participate in the solicitation and evaluation of offers to ensure that all necessary transportation factors, such as transportation costs, transit arrangements, time in transit, sustainability and port capabilities, are considered and result in solicitations and contracts advantageous to the government. Provide subject matter expertise on traffic management throughout the acquisition cycle. Page 6 of 64

7 Page 7 of 64 What are the Transportation Officer s Roles as a Contracting Officer s Representative (COR)? This section of Session 4 Transportation Contracts will review the question "What are the Transportation Officer's Roles as a Contracting Officer's Representative" by exploring the following areas: What does the FAR require of CORs? What are Transportation Officer's duties as a COR? What records must a COR maintain? COs must oversee a wide variety of contracts covering numerous functional areas. For these reasons, they often rely on the technical expertise of subject matter experts, such as the transportation officer. Page 7 of 64

8 Page 8 of 64 What are the Transportation Officer s Roles as a Contracting Officer s Representative (COR)? (continued) The CO is the only one authorized to formally appoint the TO as a contracting officer representative (COR). FAR defines in 48 CFR 2.101(2013) a contracting officer representative (COR) as: "An individual, including a contracting officer's technical representative (COTR), designated and authorized in writing by the contracting officer to perform specific technical or administrative functions." According to 48 CFR 1.602(2013) a COR should be appointed for all contracts and orders that are not firm-fixed-price, and for those firm-fixed price contracts or orders where it is deemed appropriate to have a COR appointed. A CO can retain COR functions. Page 8 of 64

9 Page 9 of 64 What does the FAR require of CORs? The FAR is specific in its language regarding the responsibilities of the COR and the limitations on what the COR can direct or imply to a contractor. TOs must be cognizant of these factors when overseeing their transportation services contracts. Each agency has its own regulations for CORs. In addition, an individual who serves as a COR must maintain certified course requirements. A TO who is appointed a COR must satisfy the contracting agency's requirements for certification as a COR. Page 9 of 64

10 Page 10 of 64 What does the FAR require of CORs? (continued) The following list summarizes the requirements of a COR from 48 CFR (d) (2013): Must be government employees, unless otherwise authorized by the agency Must be certified and maintain certification in accordance with agency policy Must be qualified by training and experiences per agency policy May not be delegated authority that is already delegated to a contract administration office; but may be delegated specific duties by the CO Has no authority to make any commitments or changes that affect price, quality, quantity, delivery, or other terms and conditions of the contract, and Must be designated in writing, with copies to the CO and the contractor. The designation must include 1. The extent of the COR's authority 2. Limitations on authority 3. The time period covered 4. A statement that the authority cannot be redelegated to anyone else, and 5. A statement that the COR may be personally liable for unauthorized acts. Page 10 of 64

11 Page 11 of 64 What are Transportation Officer's duties as a COR? TOs may be appointed as CORs for transportation services contracts or contracts with transportation components. According to the User's Guide to the Contracting Officer's Representative (COR) Workbook, the COR's duties may include the following: Providing presolicitation, solicitation, and preaward technical expertise to the CO Assisting with source selection and award which may include leading source selection board Identifying to the CO issues that may impact performance of the contract Monitoring any government property provided under a contract Monitoring contractor performance and preparing technical analysis Monitoring, collecting data, performing performance measurements per the contract terms Performing technical analysis to support the CO's requests or decisions Performing inspection and acceptance of the contractor's services and deliverables noting performance issues and non-conformance to the contract terms, and Documenting contractor's past performance in the agency past performance files. Each agency may publish specific guidance for appointed CORs. Contact your acquisition or contracting department for more guidance. Page 11 of 64

12 Page 12 of 64 What records must a COR maintain? Managing a contract requires specific documentation to be maintained by the COR. The records are subject to inspection and can be used in a dispute with the contractor. 48 CFR (2013) provides the following guidance: "A contracting officer's representative (COR) assists in the technical monitoring or administration of a contract. The COR shall maintain a file for each assigned contract. The file must include, at a minimum a. A copy of the contracting officer's letter of designation and other documents describing the COR's duties and responsibilities, b. A copy of the contract administration functions delegated to a contract administration office which may not be delegated to the COR (see (d)(4)), and c. Documentation of COR actions taken in accordance with the delegation of authority." Page 12 of 64

13 Page 13 of 64 What Is a Contract? Tender of Services and transportation services contracts are two common programs to support the agency's freight and cargo shipping requirements. Tenders offer great flexibility, but for longer term relationships with transportation service providers (TSPs), the TO may consider contracts a better option for the agency. Contracting for transportation services is performed under FAR rules. Federal Acquisition Regulations (FAR) 48 Code of Federal Regulations (CFR) (2013) Contracts for Transportation or for Transportation-Related Services addresses procurement of transportation using a contract. This regulation covers procedures for acquisition by sealed bid or negotiated contracts for: Freight transportation (including local drayage) from rail, motor, domestic water (including inland, coastwise, and intercoastal) carriers, and from freight forwarders, and Transportation-related services including but not limited to stevedoring, storage, packing, marking, and ocean freight forwarding. Page 13 of 64

14 Page 14 of 64 What Is a Contract? (continued) FAR 48 CFR 2.201(2013) defines a contract as: "Contract means a mutually binding legal relationship obligating the seller to furnish the supplies or services (including construction) and the buyer to pay for them. It includes all types of commitments that obligate the Government to an expenditure of appropriated funds and that, except as otherwise authorized, are in writing. In addition to bilateral instruments, contracts include (but are not limited to): Awards and notices Job orders or task letters issued under basic ordering agreements Letter contracts Orders, such as purchase orders, under which the contract becomes effective by written acceptance or performance, and Bilateral contract modifications." Further information: Bilateral instrument: an actual contract document signed by the two parties to the agreement; i.e., the agency and a transportation service provider (TSP). Basic ordering agreement: A basic ordering agreement (BOA) (48 CFR (2013)) 'is a written instrument of understanding, negotiated between an agency, contracting activity, or contracting office and a contractor, that contains (1) terms and clauses applying to future contracts (orders) between the parties during its term, (2) a description, as specific as practicable, of supplies or services to be provided, and (3) methods for pricing, issuing, and delivering future orders under the basic ordering agreement. A basic ordering agreement is not a contract.' Purchase order: Purchase orders (POs) (48 CFR (2013)) shall specify the quantity of supplies or scope of services ordered and contain a determinable date by which performance of the services is required. Page 14 of 64

15 Page 15 of 64 What is a Contract? (continued) In addition: Blanket purchase agreements (BPAs) (48 CFR (2013)) are a simplified method of filling anticipated repetitive needs for supplies or services by establishing "charge accounts" with qualified sources of supply. BPAs should be established for use by an organization responsible for providing supplies for its own operations or for other offices, installations, projects, or functions. 48 CFR states that COs may establish BPAs when a. There are a wide variety of items in a broad class of supplies or services that are generally purchased, but the exact items, quantities, and delivery requirements are not known in advance and may vary considerably. b. There is no existing requirements contract for the same supply or service that the contracting activity is required to use. Note: Department of Defense (DoD) employs Defense Federal Acquisition Regulations (DFAR). Page 15 of 64

16 Page 16 of 64 What Role Does a Bill of Lading (BOL) Relate in the Contract Process? Using a contract to secure transportation services, transportation officers set up the movements using the rates, rules, and terms and conditions of the contract. The movements are ordered, documented and executed using bills of lading (BOLs). This is similar to the TO using a tender of service to secure transportation services. Federal Acquisition Regulations (FAR) 48 CFR defines a "bill of lading" as a transportation document, used as a receipt of goods, as documentary evidence of title, for clearing customs, and generally used as a contract of carriage. The contract of carriage is a key concept in the contract process. Page 16 of 64

17 Page 17 of 64 What Role Does a Bill of Lading (BOL) Relate in the Contract Process? (continued) What does contract of carriage mean? In transportation terms, the shipper (TO) offers the freight to the TSP, who agrees to deliver it as specified, in return for consideration (payment) at the agreed upon rate and price. This establishes an individual movement contract for transportation services, or a contract of carriage. How does this phrase relate to tenders and contracts for transportation services, particularly when a TO says "I move shipments under BOLs. I don't have or need contracts."? Using a basic ordering agreement (BOA), PO, or BPA, the TO or designated ordering officers (shippers) order service in accordance with the instructions and procedures established by the CO. These will be specified in the terms and conditions or SOW. The order for service might be verbal or in writing, but must be followed by a BOL prepared by the shipper and passed to the TSP in hard-copy or possibly by electronic data interchange (EDI) transaction if so arranged. Page 17 of 64

18 Page 18 of 64 What Role Does a Bill of Lading (BOL) Relate in the Contract Process? (continued) The U.S. General Services Administration (GSA) U.S. Government Freight Transportation Handbook states a properly completed copy of a BOL serves as a(n): Listing of materials shipped. Contract of carriage. Shipping order. Documentary evidence of title. TSP's waybill. A Waybill (WB) is a document prepared by a transportation line at the point of a shipment; it shows the point of the origin, destination, route, consignor, consignee, description of shipment and amount charged for the transportation service. It is forwarded with the shipment or sent by mail to the agent at the transfer point or waybill destination. Unlike a bill of lading, a waybill is NOT a document of title. Source: U.S. Department of Transportation, Glossary of Shipping Terms. Freight bill to the government. Notice of condition of shipment at final destination. Authorization of shipment. Page 18 of 64

19 Page 19 of 64 What Role Does a Bill of Lading (BOL) Relate in the Contract Process? (continued) What should I be aware of as a transportation officer relating to documentation? Federal Management Regulation (FMR) 41 CFR (2013) answers the question "What transportation documents must I use to acquire freight, household goods or other related transportation services?" "Bills of lading and purchase orders are the transportation documents you use to acquire freight, household goods shipments, and other transportation services. Terms and conditions in and the U.S. Government Freight Transportation Handbook are still required." FAR 48 CFR Policies requires that: "For domestic shipments, the contracting officer shall authorize shipments on commercial bills of lading (CBL). Government bills of lading (GBL) may be used for international or noncontiguous domestic trade shipments or when otherwise authorized." Page 19 of 64

20 Page 20 of 64 What Role Does a Bill of Lading (BOL) Relate in the Contract Process? (continued) What should I be aware of as a transportation officer relating to documentation? (continued) The U.S. Government Freight Transportation Handbook states that in preparing a BOL the " terms and conditions and rates used to calculate the total price for line haul transportation and any accessorial or special services may be derived from whatever rate tender, contract, or other arrangement the TO has entered into with the TSP." Both contracts and tenders define the terms and conditions for shipper and TSP in advance of an order. The main point is that the BOL serves as the "contract" for executing the movement of the shipment regardless of how it was arranged by either contract or tender. The BOL should reference the contract or tender under which the shipment is moving in accordance with 41 CFR (2013). Page 20 of 64

21 Page 21 of 64 Should an Agency Contract for Transportation Services? This section of Session 4 Transportation Contracts will review the question "Should an Agency Contract for Transportation Services" by exploring the following areas: When should you consider using a contract? What are the advantages of using contracts? What are the disadvantages of using contracts? Can I use another agency's contracts? What factors should I consider when using another agency's contracts? How do I arrange to use another agency's contracts? Page 21 of 64

22 Page 22 of 64 Should an Agency Contract for Transportation Services? (continued) What is an example of when an agency should consider using a contract? Your agency plans to purchase large forklifts at the rate of five per month for a period of three years. They must be moved to various sites within the country, with some sites receiving more than one. The forklifts are oversize and require special trailers for movement. Understanding the distinction of Free on Board (FOB) Destination and FOB Origin will assist in providing the determination of whether the agency should contract for transportation services. FAR 48 CFR 2.201(2013) defines: FOB destination means free on board at destination; i.e., the seller or consignor delivers the goods on seller's or consignor's conveyance at destination. Unless the contract provides otherwise, the seller or consignor is responsible for the cost of shipping and risk of loss. For use in the clause at , see the definition at (a). FOB origin means free on board at origin; i.e., the seller or consignor places the goods on the conveyance. Unless the contract provides otherwise, the buyer or consignee is responsible for the cost of shipping and risk of loss. For use in the clause at , refer to the definition at (a). FOB ***(For other types of FOB refer to ). Page 22 of 64

23 Page 23 of 64 Should an Agency Contract for Transportation Services? (continued) What is an example using FOB destination? The forklift vendor arranges the transportation to the consignees, and the transportation cost is included in the delivered price of each forklift. In this case, the agency can include transportation and delivery services as specific line items within the supply contract used to buy the forklifts. In this case, the TO would then provide technical support to the CO to develop transportation requirements and assist in the evaluation of offers from vendors. What is an example using FOB origin? The agency will arrange the transportation from the vendor's shipping dock to the consignees and take one of the following actions. The agency may choose to use TSP rate tenders and have the agency TO manage the transportation in-house. The agency may initiate a separate contract for the transport of the forklifts from the manufacturer's site to the consignee locations. Under this scenario, the TO will help develop the requirements for specialized service and provide technical assistance to the CO. The agency may use existing contracts of another "sponsor agency." Page 23 of 64

24 Page 24 of 64 When should you consider using a contract? A contract can provide the TO transportation services ranging from a single-movement contract to a single event contract, such as an office move, to a long-term contract. With a contract in place, orders for transportation services can be quickly executed. FMR 41 CFR (2013) provides guidance when considering whether to pursue FAR contracts for transportation services. FAR 48 CFR provides the following: (a) (b) All Government agencies may contract for transportation or for transportation-related services and execute basic ordering agreements (BOA's) (see subpart 16.7) unless agency regulations prescribe otherwise. However, it is generally more economical and efficient for most agencies to make use of term contracts and basic ordering agreements that have been executed by agencies that employ personnel experienced in contracting for transportation or for transportation related services. The Department of Defense (DOD) and the General Services Administration (GSA) contract for transportation or for transportation-related services on behalf of other activities and agencies. Agencies may obtain transportation or transportationrelated services for which the cost does not exceed the simplified acquisition threshold, if term contracts or basic ordering agreements are not available. Page 24 of 64

25 Page 25 of 64 What are the advantages of using contracts? Contracts can be beneficial in numerous ways, particularly when you: Ship consistent volumes in consistent traffic lanes Predictability is an advantage when contracting. For longer-term arrangements, TSPs will be more interested if your traffic patterns (lanes) are regular and your freight loads are substantial enough to warrant consideration. Have sufficient time to follow FAR contracting procedures Depending on the complexity of your needs, the time period between requirements identification and planning to contract award can be months. Consult your acquisition staff to see if a contract can be put in place in time to meet your requirements. The contracting office is able to handle the requirement Your transportation requirements may compete with other higher priority agency acquisitions. Depending on the size and workload of your agency acquisition staff, your requirement may be delayed or not supported. Need greater assurance of TSP performance A significant advantage of contracts over tenders is that the agency has more influence over contractor performance. Contract terms bind the TSPs to performance standards and metrics, and FAR clauses provide the government with protections and remedies for contractor nonperformance. What is an example of a greater need of TSP performance? Under tenders TSPs may regularly refuse your freight when offered, and choose to move freight of a shipper who pays more. Contract terms can require them to accept your loads or suffer a penalty for refusing, which can help ensure mission success when you are moving high-priority freight with firm required delivery dates (RDDs) Page 25 of 64

26 Page 26 of 64 Have complex movements (including one-time-only events or individual movements) Tenders may not readily support movements of hazardous, outsize, or sensitive materials, multimodal movements across borders; or other challenges to preparation, movement, and delivery. For such instances, publishing your requirements in a SOW and negotiating with interested TSPs can produce more-complete solutions. What is an example of complex movements? An agency relocating its entire operation from one office building to another can develop an SOW and advertise its requirement. The SOW could include disassembly of furniture, packing, transport, delivery to specific interior offices, reassembly of furniture, and removal of packing materials. All services can be combined in a single package with a total calculated price. Require ancillary services not covered by accessorials, or when accessorials provided under tenders are too expensive Using tenders pricing of labor-related services (such as packing and crating, delivery above the ground floor, and assembly of material) as accessorials could become cost-prohibitive. It may be possible to include these services as line items under contracts at more favorable rates, or to contract for them separately. What is an example of requiring ancillary services? An agency found that a particular TSPs' tender line haul rates were reasonable, but its accessorial services for packing and crating of shipments were disproportionally high. In one case, the solution was to award a separate contract for just the packing services. In another case, a multiservice contract was awarded. Labor for packing was added as a line item, and the price was negotiated below the previously used tender rate. Need to transfer responsibility for additional liability coverage for valuable goods to the TSP The liability of TSPs for damage or loss of freight may be limited under tenders. Because the government cannot generally purchase separate additional liability insurance, one way to ensure proper value coverage is to require the TSP to obtain and provide additional coverage, up to the specified limits, as a term of the contract. Want the highest level of competition between offerors, and Competition between potential providers is improved through the process of blind-bidding, where none of the TSPs can see any others' offers. This technique often assures the best price for services. Can take advantage of other agencies' contracts. Using other-agency contracts may offer solutions not otherwise available and simplify agency transportation operations. You should, however, ensure that your agency authorizes you to enter into such Page 26 of 64 arrangements, and the sponsor agency is authorized to extend the service.

27 Page 27 of 64 What are the disadvantages of using contracts? While contracting for transportation services can provide many advantages, it also has some limitations. Contracting can be a disadvantage when you: Cannot prepare and execute a FAR contract within your time frame Using transportation contracts requires a skilled acquisition staff and technical expertise provided by the transportation staff. After consulting with your acquisition staff, you may find there is a chance that a contract cannot be awarded prior to your required target date. If you have firm shipping dates to support, you should consider this risk and alternatives. Have recurring shipments between designated places, but do not expect sufficient volume to obtain favorable rates Be realistic and recognize that your volume may not be sufficiently attractive to encourage a TSP to negotiate a contract at better rates than it would offer under a tender. Do not have the staff to monitor quality control and administer a contract Quantifying the administrative workload is difficult and depends on a number of factors. However, as presented later, the TO's role as the COR requires reviewing and certifying the performance of the TSPs, plus other administrative tasks. Modifying the contract Once the contract has been awarded, the TO may determine additional requirements or changes in the service. This will require working with your contracting officer to create a contract amendment. This amendment may or may not be accepted by the awardee. Page 27 of 64

28 Page 28 of 64 Need greater flexibility than a contract might allow It may be hard to foresee all requirements when writing terms and conditions for a contract. If your agency receives a number of requests that are unusual and require fast, flexible support, a contract may not be the best solution. What is an example of needing greater flexibility? An agency has established contracts for transportation services covering specified lanes of traffic, types of service, and types of equipment. When presented with a short notice requirement of a different nature, the CO advised that support was outside the contract's scope of work and would require a modification, which could take up to 90 days. In another situation, for a large warehouse relocation project, the CO advised that the lead time for negotiating and awarding a contract would be approximately nine months. The agency decided to use public tenders to acquire services for both sets of requirements. Identify the Service Contract Act (SCA) may apply to contract labor cost and therefore increase your transportation costs. For government contracts over $2,500, the Service Contract Act may require TSPs to pay federal minimum wage, fringe benefits, and overtime that are higher than the local area rates. The TSP must factor these higher labor cost in its rates and pricing, which is passed to the shipper. In accordance with FAR 48 CFR (2013), the SCA does not apply to "any contract for transporting freight or personnel by vessel, aircraft, bus, truck, express, railroad, or oil or gas pipeline where published tariff rates are in effect." (In this case, the term "contract" is an agreement to provide transportation services. A tariff is another term used interchangeably for tender.) This means that for transportation services procured under a FAR contract meeting the threshold, the TSP must comply with the SCA. But, if those same transportation services are obtained using tenders, the TSP is exempt. When considering contract and tender solutions, you should determine if the SCA will affect your overall transportation costs, and then compare the results. You should be aware that if there is any local packing of the commodity to be transported, the transportation officer may consider using a Bill of Lading or contract specifically for packing. SCA can impact both local and multi-state transports. If in doubt if this applies, contact the CO. Page 28 of 64

29 Page 29 of 64 Can I use another agency's contracts? FMR 41 CFR (2013) allows agencies to "Use another agency's contract or rate tender with a TSP only if allowed by the terms of that agreement or if the Administrator of General Services delegates authority to another agency to enter an agreement available to other Executive agencies." Agencies with limited experience or capability to negotiate their own contracts can experience benefits from using those contracts executed by other agencies such as: Avoidance of negotiation. The sponsoring agency may be able to build into its contract a solicitation that is tailored to your needs, with special levels of service or specific routes. TSPs then respond specifically to your requirements. The sponsoring agency may be able to obtain more-favorable rates and terms due to its larger volume and carrier base. Combining traffic volumes can improve agency leverage in the marketplace, consolidate routes and improve sustainability. The sponsoring agency may offer a variety of services that you do not have to duplicate within your agency; these may include use of a transportation management system (TMS) for cost comparison and production of bills of lading, analysis, and reports. Examples of contracts negotiated for federal agencies is the small package services provided under the GSA Domestic Delivery Services (DDS) and DoD Worldwide Express (WWX). Page 29 of 64

30 Page 30 of 64 What factors should I consider when using another agency's contracts? While another agency may have contracts that are available for use, you should not automatically assume that this is your best course of action. It may be convenient to use those services, but the result may not be a best-value solution for your transportation needs. Although the rates for a specific shipment may be lower than a solution you could have obtained, a service fee charged by the agency to use its contract may result in a higher total transportation cost. In many cases the rates charged by contract vendors include a fee paid by the vendor to the contracting office. GSA Freight Management Program requires federal agencies to sign a Transportation Services Agreement (TSA) prior to shipping freight, using the Freight Management Program's Standard Tender of Service. By signing the TSA, the federal agency agrees to remit to GSA an Industrial Funding Fee against the total transportation charges paid to a Transportation Service Provider to cover GSA's administrative management costs. Page 30 of 64

31 Page 31 of 64 What factors should I consider when using another agency's contracts? (continued) FMR 41 CFR (2013) provides guidance for factor consideration: (a) (b) (c) (d) Assure that the contract or rate tender meets any special requirements unique to your agency Pay any other charges imposed by the other agency for external use of their contract or rate tender Ensure the terms of the other agency's contract or rate tender allow you to use it, and Ensure that the agency offering this service has the authority or a delegation of authority from GSA to offer such services to your agency. Page 31 of 64

32 Page 32 of 64 How do I arrange to use another agency's contracts? Gaining access to other agencies' contracts may require formal or informal agreements, such as memorandums of understanding or agreement (MOU or MOA) or a similar document as prescribed within the agencies. It may also require enrolling in the program with certain conditions, such as agreeing to use electronic billing and payment systems, subscribing to the sponsor agency's transportation management system, or providing financial lines of accounting or funds setasides in an escrow-like arrangement to ensure that adequate funds are available. You should first determine if your agency authorizes you to use another agency's program, and then contact the sponsoring agency directly for specific information. Be careful to identify the nature of the services and terms of use to ensure they meet your requirements and are acceptable to your agency. You may want to contact your Chief Financial Officer and the General Counsel office for additional agency guidelines. Page 32 of 64

33 Page 33 of 64 How Does an Agency Establish Transportation Service Contracts? This section of Session 4 Transportation Contracts will review the question "How Does an Agency Establish Transportation Service Contracts" by exploring the following areas: What occurs in the presolicitation phase (1st Phase)? What occurs in the solicitation and award phase (2nd Phase)? What occurs in the post-award administration phase (3rd Phase)? Government acquisition is a highly technical area with many specific legal and administrative requirements. Many of the process steps are similar to those used to establish a tender program, but their order may be different. Page 33 of 64

34 Page 34 of 64 How Does an Agency Establish Transportation Service Contracts? (continued) Detailed guidance on contracts for transportation and transportation-related services is found in FAR 48 CFR 47.2(2013) Contracts for Transportation or Transportation-Related Services. The contracting officer is responsible for the agency contracts. There may be two designations of contracting officers within an agency. The procuring contracting officer (PCO) is responsible for the first two phases of the contract An administrative contracting officer (ACO) may be appointed to oversee the third phase of the contract, or The CO may be responsible for all three phases. Page 34 of 64

35 Page 35 of 64 What occurs in the presolicitation phase (1st Phase)? The major preparatory "groundwork" is done in this phase. The TO works closely with the acquisition authority to determine if a contract is a viable solution, and then with the designated CO to assemble information and develop a plan for proceeding. The activities of the presolicitation phase are: 1. Determining the need 2. Initiating the procurement process 3. Analyzing your requirements, and 4. Sourcing. After you decide to pursue a transportation services contract, your first activity will be to consult your agency's acquisition or contracting authority. Together, you discuss your needs and concepts for obtaining TSP services. If you have not already done so and you jointly decide to go forward, your next activity will be to develop a forecast of your requirements. After reviewing these, the contracting authority will start the acquisition planning process. Page 35 of 64

36 Page 36 of 64 What occurs in the presolicitation phase (1st Phase)? (continued) 1. Determining the need At this stage, the CO should inform you of any lead-time requirements that may apply. These may include the time required to get SCA-related wage determinations, and time needed for potential TSPs to inspect the government's origin and destination locations, or the government to inspect TSP equipment or facilities. If you have a time constraint that cannot be met, it should be identified at this time so you can seek alternatives to the contracting method. You need to know what you want to accomplish with your contract in terms of TSP-provided services by asking: Who is your shipper customer base and what are their requirements? What are your lanes, volumes, or other requirements? Do they vary between activities? Does your agency have special needs? Can these be met under the terms of a contract? Page 36 of 64

37 Page 37 of 64 What occurs in the presolicitation phase (1st Phase)? (continued) 2. Initiating the procurement process To start the formal contracting process, your contracting authority may require you to generate a purchase request or other document that formally captures the acquisition requirement. Depending on the type of contract, a key part of this process may be to identify the source of funding and limits that will be used to support your contract. Page 37 of 64

38 Page 38 of 64 What occurs in the presolicitation phase (1st Phase)? (continued) 3. Analyzing your requirements The TO's role in this phase will be to help develop service requirements and desired performance levels, and to participate in development of the SOW and list of services to be provided under the contract. These should reflect your transportation functional needs. The information you develop will be used in the SOW. It should include all of your origin and destination lanes, volume projections, types of equipment the TSPs need to provide, special requirements such as movement of hazardous or high-value freight, increased liability requirements, and other transportation-related services that you will expect to require over the contract period. Developing and assembling this information at this stage ensures its availability for inclusion in the SOW. For agencies with a large number of lanes and requiring many types of equipment, much of this detailed information may be included in the SOW as appendices. Page 38 of 64

39 Page 39 of 64 What occurs in the presolicitation phase (1st Phase)? (continued) 4. Sourcing The CO will determine the "extent of competition" for the acquisition. This includes: Identifying potential sources Determining whether setasides for small and disadvantaged businesses will be considered, and Defining competition requirements. Price and technical evaluation factors should be developed, and the method of procurement determined. The TO may recommend or be asked to assist in identifying potential sources. Page 39 of 64

40 Page 40 of 64 What occurs in the solicitation and award phase (2nd Phase)? The CO will accomplish most of the actions that occur in the solicitation and award phase but may consult the TO for technical assistance as the subject matter expert or if the TO is serving as the COR. The activities of the solicitation and award phase are: 1. Develop terms and conditions 2. Develop Statement of Work (SOW) 3. Publish the solicitation (Request for Offers) 4. Receive and evaluate offers, and 5. Select for award. Page 40 of 64

41 Page 41 of 64 What occurs in the solicitation and award phase (2nd Phase)? (continued) 1. Develop terms and conditions In terms of content, developing the terms and conditions is much the same as for tenders. FMR 41 CFR (2013) emphasizes that terms and conditions are important to protect the government's interest and establish the performance and standards expected of the TSP. FMR 41 CFR (2013) is very clear on the minimums that should be included when agencies are developing their terms and conditions and include the following: Charges cannot be prepaid, and charges are not paid at time of delivery. To qualify for the rates specified in a rate tender filed under the provisions of the federal transportation procurement statutes (49 USC or 49 USC 13712), property must be shipped by or for the government and the rate tender must indicate the government is either the consignor or the consignee and include the following statement: "Transportation is for the (agency name) and the total charges paid to the transportation service provider by the consignor or consignee are for the benefit of the Government." Other terms and conditions specific to your agency or the TSP, such as specialized packaging requirements or hazardous materials. Page 41 of 64

42 Page 42 of 64 What occurs in the solicitation and award phase (2nd Phase)? (continued) 1. Develop terms and conditions (continued) Federal Acquisition Regulation 48 CFR (2013) Solicitation provisions, contract clauses, and special requirements states: "The CO shall include provisions, clauses, and special requirements in solicitations and contracts for transportation or for transportation-related services as prescribed in through " This table illustrates the key concepts of FAR 48 CFR to Page 42 of 64

43 Page 43 of 64 Key Concepts of FAR 48 CFR to FAR 48 CFR Section Information to Be Included Qualifications of offerors (applies Operating authorities, permits to TSPs) Inspection of shipping and receiving facilities Requirement to furnish financial statements Duration of contract and time of Specific expiration date or state length of performance time contract is in effect (e.g., one year commencing on day of contract award) If a one-time event, time by which completion is required If a major job, timeframe for completion of segments of work Performance time for services (such as days of week, hours for pickup and delivery, and advance notice to be given to TSP) Description of shipment, origin, Origins (where freight is shipped from) and destination Destinations (where freight will be delivered) Inventory of freight to be moved, freight classification descriptions (obtained from the TO) Descriptions and details such as size, weight, packaging, unusual value, hazardous or sensitive, etc. Quantities for single jobs, or estimates of weights or quantities by timeframe for extended periods, such as shipments per week or month) Exclusions (freight that will not be transported by the TSP, such as certain commodities, hazardous, or shipments that are below minimum or maximum weight limits) Determination of weights Specify the method of determining the weights of shipments Contractor responsibilities (vary Type of equipment (enclosed vans, with the kinds of freight to be shipped or flatbeds, length required, etc.) services to be provided) Supervision, labor, or materials that the TSP is to provide Accessorial services Receipt of shipment Loading and unloading Page 43 of 64

44 Page 44 of 64 Return of undelivered freight Rates and charges Statement that charges will not exceed the TSP s charges to the general public or tenders to the government Listing of charges by service and pricing method (hourly, by piece or weight) Rate request based on graduated weight breaks (TO develops for TSP use) Specify how rates are to be determined for multiple origins and/or destination and for multiple shipments from a single origin to same destination Estimated quantities or weights of shipments between each origin and destination pair when unknown Conditions and rates for additional services if not covered in basic rates (e.g., inside delivery) Liability and insurance TSP s liability for loss and damage to freight being carried TSP s liability for damage or injury to other property and personnel Insurance limits that must be maintained by the TSP References to declared value of shipments Government responsibilities (that have a direct bearing on the performance of the TSP) Annotation and distribution of shipping and billing documents Advance notice provided to the TSP Any government-provided equipment (with or without operators) by location and type Direction and marking of shipments as required Statement that the contract is not affected by any oral agreements Details on the responsibilities of the TSP, contracting agency, and consignee on producing and distributing shipping and billing documents Page 44 of 64

45 Page 45 of 64 What occurs in the solicitation and award phase (2nd Phase)? (continued) 2. Develop the Statement of Work (SOW) The CO assembles all of the elements to be included in the SOW into a single document. The CO will request the TO to submit the transportation related requirements. Page 45 of 64

46 Page 46 of 64 What is an example of an SOW outline and the transportation related requirements the TO will provide? I. Introduction a. Scope b. Purpose c. Concept II. III. IV. General Requirements a. Locations of performance b. Shipper and receiver operating hours c. Holidays d. Third party electronic payment system e. Official table of distances f. In-transit visibility (ITV) reporting requirements g. Use of electronic data interchange (EDI) h. Fuel surcharge program i. Type of shipments j. Exclusions k. Contractor furnished resources and equipment pool l. Inspection of contractor equipment m. Workload estimates n. Rates and rate reductions o. Security (physical, personnel, information) Description of services a. Sustainable policies and practices b. How traffic is awarded c. Hazardous shipments d. Pickup and delivery e. Use of subcontractors f. Transit times g. Notifications (Delay and Prior to Delivery) h. Proof of Delivery i. Overages, Shortages, and Damages j. Loading and unloading responsibilities k. Additional services l. Expedited service m. Securing/protecting shipments n. Storage o. Signature and tally record service p. Detention and other services q. Cargo liability r. Quality control plan and quality assurance s. Past performance information t. Contracting Officer's Representative References V. Work areas and performance requirements a. Performance requirements b. Performance objectives (order acceptance and on-time pickup; on-time delivery; ITV; delivery/performance reports, monthly revenue report) VI. Appendices a. Performance requirement summary b. Origin regions c. Destination regions d. Transit time guide e. Accessorial charges Page 46 of 64 f. Shipper unique requirement

47 Page 47 of 64 What occurs in the solicitation and award phase (2nd Phase)? (continued) 3. Publish the solicitation (Request for Offers) The CO prepares the solicitation and publicizes the proposed procurement. The CO may decide to have a pre-bid or preproposal conference with interested bidders, and The TO may be required to provide input. Based on these events, the CO may: Respond to any pre-award inquiries Modify or amend the solicitation, or Decide to cancel it. Page 47 of 64

48 Page 48 of 64 What occurs in the solicitation and award phase (2nd Phase)? (continued) 4. Receive and evaluate offers The CO receives and processes the offers. The CO carefully reviews all offers and identifies any contractual issues like subcontracting requirements. The CO may also contact respondents for questions or negotiation, or to obtain additional information needed for the evaluation. Page 48 of 64

49 Page 49 of 64 What occurs in the solicitation and award phase (2nd Phase)? (continued) 5. Select for award Evaluation of offers is led by the CO, or COR with recommendations to the CO. The CO may review source selection information independently or form a source selection team that includes subject matter experts that should include transportation officer representation. The technical evaluation may be led by designated parties who may or may not be CORs. Page 49 of 64

50 Page 50 of 64 What occurs in the solicitation and award phase (2nd Phase)? (continued) 5. Select for award (continued) As defined in the FAR 48 CFR "Source selection information" means any of the following information that is prepared for use by an agency for the purpose of evaluating a bid or proposal to enter into an agency procurement contract, if that information has not been previously made available to the public or disclosed publicly: 1. Bid prices submitted in response to an agency invitation for bids, or lists of those bid prices before bid opening. 2. Proposed costs or prices submitted in response to an agency solicitation, or lists of those proposed costs or prices. 3. Source selection plans. 4. Technical evaluation plans. 5. Technical evaluations of proposals. 6. Cost or price evaluations of proposals. 7. Competitive range determinations that identify proposals that have a reasonable chance of being selected for award of a contract. 8. Ranking of bids, proposals, or competitors. 9. Reports and evaluations of source selection panels, boards, or advisory councils. 10. Other information marked as "Source Selection Information Refer to FAR and 3.104" based on a case-by-case determination by the head of the agency or the contracting officer, that its disclosure would jeopardize the integrity or successful completion of the Federal agency procurement to which the information relates." Page 50 of 64

51 Page 51 of 64 What occurs in the solicitation and award phase (2nd Phase)? (continued) 5. Select for award (continued) The CO or source selection team will review offers for technical acceptability and price. Cost and pricing data will be reviewed, and a "competitive range" will be established to determine if the prices are reasonable. Those offers that are not reasonable may not be considered. Once the selection process is completed, the CO prepares the award. The award is presented to the selected contractor, and a debriefing may be held to advise those not selected. At this point, any protests of the award are entered. The nature of the award depends on the contracting approach. In some cases, such as basic ordering agreement (BOA), no guarantee of any traffic is made by the government. In other awards, TSPs are informed they are eligible for traffic, which is in turn ordered per the terms and conditions and executed with a BOL. What is an example for a Transportation Traffic Award? By submitting an offer, the contractor agrees to accept orders for service on a routine basis within the estimated volume of traffic on each lane. The contractor agrees to dedicate adequate resources to satisfactorily perform those orders and to provide service on a nondiscriminatory basis between high volume and lower volume shipping activities. Page 51 of 64

52 Page 52 of 64 What happens in the post-award administration phase (3rd Phase)? After the contract is awarded, your responsibilities increase as you interface with the administrative contracting officer to monitor the contractor's performance. The activities of a post-award administrative phase are: 1. Plan for contract start-up 2. Perform quality assurance 3. Monitor accounting and payment, and 4. Modify, closeout, terminate contracts. Page 52 of 64

53 Page 53 of 64 What happens in the post-award administration phase (3rd Phase)? (continued) 1. Plan for contract start-up The CO conducts detailed planning for administering the contract and may conduct orientations for the awardee. Rules for ordering against the contract and any subcontracting arrangements not otherwise covered in the SOW before will be specified. As with tenders, in accordance with 41 CFR (2013), copies of each contract of special rates and accessorial charges negotiated must be forwarded to GSA to support the transportation payment and audit processes. Page 53 of 64

54 Page 54 of 64 What happens in the post-award administration phase (3rd Phase)? (continued) 2. Perform Quality Assurance The TO has an important role in this area. Using the performance standards and metrics included in the SOW, the TO assists with monitoring and inspecting the contractor's work and accepting its services or products. The TO will work with the CO to report and resolve delays, or other performance issues, and may need to administer any government property provided to the contractor. Page 54 of 64

55 Page 55 of 64 What happens in the post-award administration phase (3rd Phase)? (continued) 3. Monitor Accounting and Payment The CO and your agency accounting sections track: Costs Payments Claims Price and fee adjustments, or Collection of any monies due from the contractor. They also watch for evidence of defective pricing, unallowable costs, or exceeding of cost limits. Page 55 of 64

56 Page 56 of 64 What happens in the post-award administration phase (3rd Phase)? (continued) 4. Modify, Closeout, Terminate Contracts You may need to alert the CO as early in the contract period as possible if there is a need to extend or modify the contract. The CO assists in extending the contract for any option year periods, and you jointly may decide to modify the contract terms. Only the CO can sign and issue modifications. Once the contract period is up, the CO guides the TO through closeout and termination of the contract. Any claims either government vs. contractor or vice versa, are addressed during this phase. The COR also participates in a performance evaluation of the contractor in accordance with 48 CFR Page 56 of 64

57 Page 57 of 64 Is there a checklist that identifies the difference processes for establishing a transportation services contract? Checklist for Establishing a Transportation Service Contract Presolicitation Phase (1st Phase) Determine the need Initiate the procurement process Analyze the requirement Determine sources to be considered Solicitation and Award Phase (2nd Phase) Develop terms and conditions Develop scope of work (SOW) Publish the solicitation (Request for Offers) Receive and evaluate offers Select for award Notify TSPs of acceptance Post-award Administration Phase (3rd Phase) Plan for contract start-up Perform quality assurance Monitor accounting and payment Modify, close-out, terminate contract Page 57 of 64

58 Page 58 of 64 Wrap Up In this session on transportation contracts, you have been introduced to: TOs may interface with their agency acquisition staffs in two ways. First, to negotiate contracts, BOAs, or BPAs for ordering transportation services (movement) or transportation-related services (i.e., packing or storage). The second is to provide assistance in determining how material purchased through acquisitions might best be transported either under the contract or through alternate shipping arrangements. Subject to agency approval, the FAR permits agencies to enter into contracts with TSPs. It also encourages agencies to use contracts already negotiated by sponsor agencies and open to participation. Contracts have many advantages including the ability to set enforceable TSP performance expectations. But, they also have disadvantages, such as the time involved to put a contract in place and the potential higher costs if the SCA applies. Establishing and managing a contract involves three phases, with multiple steps in each. The TO assists the CO in each phase, from pre-solicitation planning, to development of the SOW and source selection, to monitoring the TSP's performance as the COR. Development of the SOW is perhaps the most challenging step, and the FAR includes specific categories and clauses that must be included. After contract award, the CO retains all authority to interpret, modify, or terminate the contract. The TO or COR has no authority to make any commitments or changes that affect price, quality, quantity, delivery, or other terms and conditions of the contract. Page 58 of 64

59 Page 59 of 64 Wrap Up (continued) For procurements that involve the movement of material, the FAR requires the CO to contact the TO for subject matter expertise in shipping and traffic management issues that will affect the cost of the procurement. TOs are similarly obliged to assist the CO in these matters. For government contracts over $2,500, the Service Contract Act may require TSPs to pay federal minimum wage, fringe benefits, and overtime that are higher than the local area rates. The TSP must factor these higher labor cost in its rates and pricing, which is passed to the shipper. In accordance with FAR 48 CFR (2013), the SCA does not apply to "any contract for transporting freight or personnel by vessel, aircraft, bus, truck, express, railroad, or oil or gas pipeline where published tariff rates are in effect." In this case, the term "contract" is an agreement to provide transportation services. A tariff is another term used interchangeably for tender. This means that for transportation services procured under a FAR contract meeting the threshold, the TSP must comply with the SCA. But, if those same transportation services are obtained using tenders, the TSP is exempt. When considering contract and tender solutions, you should determine if the SCA will affect your overall transportation costs, and then compare the results. Page 59 of 64

60 Page 60 of 64 Glossary of Terms Contract: A mutually binding legal relationship obligating the seller to furnish the supplies or services (including construction) and the buyer to pay for them. It includes all types of commitments that obligate the government to an expenditure of appropriated funds and that, except as otherwise authorized, are in writing. In addition to bilateral instruments, contracts include (but are not limited to) awards and notices of awards; job orders or task letters issued under basic ordering agreements; letter contracts; orders, such as purchase orders, under which the contract becomes effective by written acceptance or performance; and bilateral contract modifications. (48 CFR ) Page 60 of 64

61 Page 61 of 64 Knowledge Review Select True or False: The Service Contract Act may result in higher TSP contract rates when compared with the same TSP's tender rates. A. True B. False Answer: True. Feedback: Congratulations! You answered A - True, you are correct. The Service Contract Act requires contractors and subcontractors performing services on prime contracts in excess of $2,500 to pay service employees wage rates and fringe benefits found prevailing in the locality. However, under the law, tenders are exempt, so TSPs may pay lower wages and benefits. Transportation services procured under a FAR contract meeting the threshold may, therefore, involve higher labor costs to the TSP. These costs are passed along to the customer in the form of higher rates. You should consider labor costs in your decision on whether to contract or use tenders. Page 61 of 64

62 Page 62 of 64 Knowledge Review Select the correct response(s): Select the tasks listed below that the Transportation Officer provides to the Contracting Officer for the Statement of Work. A. List of services and equipment to be provided by the TSP. B. Official distance tables. C. Rules for electronic payment. D. List of origins and destinations. E. TSP reporting requirements. F. Estimates of shipment frequency and volume. Answer: All of the above. Feedback: Congratulations! You selected all of the answers, you are correct. The TO serves as the subject matter expert and must provide the information to the Contracting Officer to develop for the SOW. Information for a SOW includes the types of service and equipment to be obtained from the TSP, list of origins and destinations, and estimates of the workload so the TSP can properly consider them during offer preparation. Page 62 of 64

63 Page 63 of 64 Knowledge Review Select the correct response(s): Serving as a COR, the Transportation Officer may (select all that apply): A. Provide technical assistance to the CO. B. Monitor contractor's performance. C. Report non-conformance or performance issues to the CO. D. Make commitments or changes that affect price, quality, quantity, delivery, or other terms and conditions of the contract. Answer: A, B, and C Feedback: Congratulations! You answered A - Provide technical assistance to the CO, B - Monitor contractor's performance, and C - Report non-conformance or performance issues to the CO, you are correct! A COR has no authority to make any commitments or changes that affect price, quality, quantity, delivery, or other terms and conditions of the contract. Further information is available at 48 CFR (d) (2013). Page 63 of 64

64 Page 64 of 64 Continuing the Learning Process In addition to the sites identified in this session, you can find more information on the topic of Transportation Contracts from the following: Federal Acquisition Regulation (FAR) 48 CFR 47(2013), Transportation. 48 CFR 47.1(2013) provides general guidance 48 CFR 47.2(2013) covers contracts for transportation or for transportation-related services Service Contract Act (SCA) information can be located at the U.S. Department of Labor Wage and Hour Division. GSA.gov 48 CFR 47.3(2013) addresses transportation in supply contracts. Delivery terms, transportation clauses, and guidance specific to transportation modes (air and ocean, using U.S. flag carriers) are provided in the remaining sections of Part 47 Impact on the transportation industry is available in the U.S. Department of Labor Memorandum 185, Application of Section 7 (3) of the McNamara-O'Hara Service Contract Act to Motor Carriers Wage Determinations Online.gov Freight Management Program Chief Acquisition Officers Council ( Defense Acquisition University ( Federal Acquisition Institute ( FedBizOpps (FedBizOpps.gov). Contact your agency's acquisition office for information on contracts, and specific guidance on COR duties and responsibilities. It is critical agencies ensure compliance to Prepayment and Postpayment Transportation Audit requirements identified in 31 U.S.C and 41 CFR Transportation Payment and Audit. Contact GSA Transportation Audits Division at AskAudits@gsa gov or by phone (703) for further information. Page 64 of 64