CMBOK Body of Knowledge Contract Management Framework Overview

CMBOK Body of Knowledge Contract Management Framework, Overview, and Pre-Award Competencies Breakout Session # A 17 Name: Dr. Mike Criss Date: July 30, 2012 Time: 11: 14 AM – 12: 30 PM 1 1

CMBOK Body of Knowledge • • Preface and Acknowledgements Chapter 1, The Contract Management Framework Chapter 2, The CMBOK: An Overview Chapter 3, The CMBOK Knowledge Areas/Outline of Competencies • Chapter 4, The CMBOK Lexicon • Chapter 5, NCMA Certification Exams

Chapter 1 The Contract Management Framework • • Purpose of the Guide What is a Contract? What is Contract Management? The Contract Management Profession About NCMA Professional Certification The CMBOK Structure

Chapter 2 The CMBOK: An Overview • • • Contract Life Cycle Contract Stakeholders Organizational Influences General Business Competencies General Contracting Competencies

Contract Life Cycle • Contracts have a defined beginning and an end. The contract life cycle is in several contract phases – Pre-Award • Acquisition Planning – Contract Award – Post-Award. – There are special competencies required; the requirement, contract type and processes

Contract Stakeholders • A contract is an agreement between two parties. • There are contract stakeholders on both sides of the agreement

Organizational Influences • Organizational influences effect the contracting process. • Internal or external to the organization. • Senior Management – Adjust, or change, company focus through strategic planning. – Evolving technology • Affects business processes, • Can affect organizational structure – Processes in place to take advantage of evolving technology. • Other competitors can drive the need to maintain awareness of industry best practices

General Business Competencies • A contracting professional must be a business professional. • Clear understanding of the general functions of business and government • How those functions combine with and compliment each other to achieve organizational goals.

General Business Competencies • Extend beyond the specialized set of knowledge and experience unique to the profession. – – – – Rightsizing Outsourcing Lean Management Six Sigma Continuous Process Improvement Balanced Scorecards Transformation Reinvention

General Business Competencies • Can no longer perform effectively absent of specialized knowledge and experience. – Matrix-managed functions, – Project or program teams, – Permanent or temporary process improvement groups, • Structures exist to ensure each segment makes a positive contribution to the business of the business

General Contracting Competencies • A contract manager's skills are developed through continuing education and practice • A successful contract manager has developed skills in three main areas: – Technical, – Conceptual, and – Human Relations.

General Contracting Competencies • Technical skills are demonstrated by competently performing the tasks required. • Conceptual skills are how the contract manager visualizes the organization’s goals. – These skills involve the ability to see and use the “big picture” for greater organizational and personal success. • Human relations skills focus on the "people" aspect of contract management.

Chapter 3 The CMBOK Knowledge Areas/Outline of Competencies • • • 1. 0 Pre-Award • 1. 1 Laws and Regulations 1. 2 Contract Principles • 1. 3 Standards of Conduct • 1. 4 Socioeconomic • Programs • 1. 5 Contract Structures • 1. 6 Contracting Methods • 1. 7 Contract Financing 1. 8 Intellectual Property 2. 0 Acquisition Planning/Strategy 2. 1 Acquisition Planning 2. 2 Acquisition Methodology 2. 3 Proposal Preparation 2. 4 Negotiation 2. 5 Source Selection 2. 6 Protest

The CMBOK Knowledge Areas/Outline of Competencies • • • 3. 0 Post-Award 3. 1 Contract Administration 3. 2 Contract Performance/Quality Assurance 3. 3 Subcontract Management 3. 4 Contract Changes/modifications 3. 5 Property Administration 3. 6 Transportation 3. 7 Disputes 3. 8 Contract Closeout 3. 9 Contract Termination • • • 4. 0 Specialized Knowledge Areas 4. 1 Research and Development 4. 2 Architecture and Engineer Services and Construction 4. 3 Information Technology 4. 4 Major Systems 4. 5 Service Contracts 4. 6 International Contracting 4. 7 State and Local Government 4. 8 Supply Chain 4. 9 Performance based acquisition 4. 10 Government Property 4. 11 Other Specialized Areas

• • • The CMBOK Knowledge Areas/Outline of Competencies 5. 0 Business 5. 1 Management 5. 2 Marketing 5. 3 Operations Management 5. 4 Finance Analysis 5. 5 Accounting 5. 6 Economics 5. 7 Quantitative Methods 5. 8 Information Science 5. 9 Leadership Skills

Laws and Regulations • • The Uniform Commercial Code (UCC) The Federal Acquisition Regulation (FAR) Laws Related to International Contracting Case Law

Contract Principles • The states, not the Federal government, are the primary source of law on commercial transactions in the U. S. • This includes state statutory and common (judge-made) law and private law. • Private law includes the terms of the agreement between the parties who exchanged promises for consideration. • These terms may override rules established by state law. • Statutory law may require some contracts be put in writing and executed using specific procedures

Commercial Contract Law Basics • Agency • Authority – Actual – Express – Implied – Apparent

Uniform Commercial Code The Uniform Commercial Code Articles Article 1: General Provisions Article 2: Sales Article 2 A: Leases Article 3: Negotiable Instruments Article 4: Bank Deposit Article 4 A: Funds Transfers Article 5: Letters of Credit Article 6: Bulk Transfers and Bulk Sales Article 7: Warehouse Receipts, Bills of Lading and Other Documents of Title Article 8: Investment Securities Article 9: Secured Transactions

UCC • Contract Modification • Performance • Implied Warranties – Merchantability – Fitness for a Particular Purpose • Repudiation • Sarbanes-Oxley Act

Government Contract Law Basics Constitution –“Necessary and Proper Clause” “Make all laws which shall be necessary and proper for carrying into execution the foregoing powers and all other powers vested by this Constitution of the government of the United States, or in any department or officer thereof. ” Article 1, § 8, Clause 18

Statutes and Regulations Anti-Deficiency Act “No officer or employee of the United States shall make or authorize expenditure from or create or authorize an obligation under any appropriation or fund in excess of the amount available therein; nor shall any such officer or employee involve the government in any contract or other obligation, for payment of money for any purpose, in advance of appropriations made for such purpose, unless such contract or obligation is authorized by law. ” 31 U. S. C. § 665(a)

Statutes and Regulations • Federal Acquisition Regulation – Enacted by Law, PL 93 -400 • Administered by Two Councils – Defense Acquisition Regulations Council • Headed by Do. D • Members: Military Departments, DLA and NASA – Civilian Agency Acquisition Council • Headed by GSA • Members: 13 Civilian Departments and SBA.

Statutes and Regulations • “Restatement of the Law, Second”, Contracts. ” – The “Restatement” is a presentation of contract law by the American Law Institute. It is an authoritative reference and is relied upon in judicial opinions. • UCC • Ratifications

Laws Related to International Contracting • • The Foreign Corrupt Practices Act (FCPA) Export Regulations Anti-Boycott Regulations Foreign Laws and Customs

1. 2 Contract Principles Figure 5

1. 3 Standards of Conduct • Federal, state and local laws, regulations and ordinances provide the legal framework that guides or regulates many activities. • Procedural or policy documents exist to formalize basic concepts and guide employers and employees to do their jobs ethically. • These documents are commonly referred to as Standards of Conduct, Codes of Ethics, Statements of Professional Responsibility, Standards of Ethical Conduct, and similar terms.

Standards of Conduct • Typical components of ethical systems may include: – The formalized, written document • Standards of Conduct or Code of Ethics – An ethics compliance officer or manager • To monitor and enforce the written standards • A senior staff executive • Direct access to the senior executive

Standards of Conduct – A formal program to provide training in ethics issues. – An internal information system – Responds to questions and provide guidance to employees. – A complaint system to receive, investigate and respond to actual or perceived issues of non-ethical behavior. – Complaint systems to provide, internally and externally, information regarding the resolution of ethics complaints. – Information about specific actions taken with regards to confirmed ethics violations

Examples of Potential Ethics Violations • • Conflict of Interest Behavior toward competitors Privacy of Information Gift giving and receiving Making and receiving political contributions Levels of dedication and work effort required Encouraged behavior Discouraged or prohibited behavior

Ethics • “Ethics are standards by which one should act based on values. Values are core beliefs such as duty, honor and integrity that motivate attitudes and actions. Not all values are ethical principles…. Ethical principles are values that relate to what is right and wrong and thus take precedence over non-ethical values when making ethical decisions. ”[1] Margaret G. Rumbaugh. “Ethical Decision-Making: Issues for Contract Managers and Educators; ”; Contract Management; April 2004; pg. 34 -35.

1. 4 Socioeconomic Programs • • • Small Business Programs Small Business Policies Small Business Set-Asides Types of Small Businesses Other Socioeconomic Programs Disaster or Emergency Assistance Activities Historically Black Colleges and Universities and Minority Institutions Diversity Application of Labor Laws to Federal Government Acquisitions Workplace and Environmental Considerations Privacy and Freedom of Information

1. 5 Contract Structures

Relationship of Contracts Types Ranked by Highest Government Risk T&M CPFF CPAF Cost Sharing FPIF FFP/EPA FFP Ranked by Highest Contractor Risk FFP/EPA FPIF Cost Sharing Cost CPAF CPFF T&M

1. 6 Contracting Methods • • • Sealed Bidding Two-Step Sealed Bidding Negotiation Simplified Acquisition Federal Supply Schedules Electronic Commerce Modular Contracting Auctions Request for Quotation (RFQ) Request for Information (RFI) • • • Unsolicited Proposal Point of Sale Transactions Master Agreements Sales Contract Framework pricing arrangement Performance based contract Single Source Negotiation Gap Fillers Prequalification Broad Agency Announcements

1. 7 Contract Financing • Commercial Contract Financing • Government Contract Financing

Commercial Contract Financing • • • Loans and lines of credit and from financial institutions Obtaining advance funding of accounts receivable Funding of purchase orders from private firms Obtaining funds from venture capitalists Negotiating favorable payment clauses Sizable down payment Milestone payments Commercial advance payments before performance has begun Commercial interim payments after some work has been done Delivery payments made after receiving and accepting a portion of the total work to be performed.

Government Contract Financing • One of two forms, private or government: – Private financing – Government Financing • Customary contract financing other than loan guarantees • Loan guarantees • Unusual contract financing • Advance payments

1. 8 Intellectual Property • • • Patent Copyright Trademark Data Rights • • • Licensing Royalties Trade Secrets Shop Rights Nondisclosure Agreement