Commercial Contract Contents:

BUSINESS CONTRACT LEGAL ELEMENTS

SOURCE OF LAW
THE STATUTE OF FRAUD
CONTRACT TYPES
OFFER, ACCEPTANCE, AND INVITATION TO TREAT
CONSIDERATION

DISCHARGING OR INVALIDATING A CONTRACT
BREACH OF CONTRACT
POSSIBLE DEFENSES
DAMAGE RECOVERY
MEASURING DAMAGES
THE EXPECTATION MEASURE
RELIANCE INTEREST
RESTITUTION
LIMITATIONS
SATISFACTION CLAUSE
AGENCY RELATIONSHIP

Special Update:

Contract law points to note
Privity of contract
Postal rule
Contractual mistakes
Contract Interpretation
Request for Expressions of Interest (RFEI)
Request for Supplier Qualifications (RFSQ)
Vendors of record (VOR)
Repetitive Procurement
A Typical bid evaluation process
Bid Evaluation Team
Discrimination
Code of ethics in the supply chain
Green procurement through Environmental Sourcing
Buy America Act
Treaties and Agreements

Federal Knowledge Contents:

The best thing to do to learn about FAR is to go through the original FAR text. However, the original text is massive. It can take you weeks or months to go through and digest the material. To save your time, we have done the work for you – we extract and summarize the relevant FAR sections and parts for you so you can focus on only those exam relevant contents. 

WHAT FAR IS ALL ABOUT

3.2 CONTRACTOR GRATUITIES TO GOVERNMENT PERSONNEL
3.4 CONTINGENT FEES
3.5 OTHER IMPROPER BUSINESS PRACTICES
3.6 CONTRACTS WITH GOVERNMENT EMPLOYEES OR ORGANIZATIONS OWNED OR CONTROLLED BY THEM
4.1 CONTRACT EXECUTION
4.4 SAFEGUARDING CLASSIFIED INFORMATION WITHIN INDUSTRY
4.7 CONTRACTOR RECORDS RETENTION
4.8 GOVERNMENT CONTRACT FILES
6.1 FULL AND OPEN COMPETITION
6.2 FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
6.3 OTHER THAN FULL AND OPEN COMPETITION
9.1 RESPONSIBLE PROSPECTIVE CONTRACTORS
9.2 QUALIFICATIONS REQUIREMENTS
11.3 ACCEPTABLE MATERIAL
11.4 DELIVERY OR PERFORMANCE SCHEDULES
11.5 LIQUIDATED DAMAGES
11.7 VARIATION IN QUANTITY
12.2 SPECIAL REQUIREMENTS FOR THE ACQUISITION OF COMMERCIAL ITEMS
12.3 SOLICITATION PROVISIONS AND CONTRACT CLAUSES FOR THE ACQUISITION OF COMMERCIAL ITEMS
14.1 USE OF SEALED BIDDING
14.2 SOLICITATION OF BIDS
14.3 SUBMISSION OF BIDS
14.4 OPENING OF BIDS AND AWARD OF CONTRACT
14.5 TWO-STEP SEALED BIDDING
15.1 SOURCE SELECTION PROCESSES AND TECHNIQUES
15.2 SOLICITATION AND RECEIPT OF PROPOSALS AND INFORMATION
15.4 CONTRACT PRICING
15.5 PREAWARD, AWARD, AND POSTAWARD NOTIFICATIONS, PROTESTS, AND MISTAKES
15.6 UNSOLICITED PROPOSALS
16.2 FIXED-PRICE CONTRACTS
16.3 COST-REIMBURSEMENT CONTRACTS
16.4 INCENTIVE CONTRACTS
16.5 INDEFINITE-DELIVERY CONTRACTS
16.6 TIME-AND-MATERIALS, LABOR-HOUR, AND LETTER CONTRACTS
17.1 MULTI-YEAR CONTRACTING
22.3 CONTRACT WORK HOURS AND SAFETY STANDARDS ACT
22.6 WALSH-HEALEY PUBLIC CONTRACTS ACT
22.8 EQUAL EMPLOYMENT OPPORTUNITY
22.9 NONDISCRIMINATION BECAUSE OF AGE
22.10 SERVICE CONTRACT ACT OF 1965, AS AMENDED
22.15 PROHIBITION OF ACQUISITION OF PRODUCTS PRODUCED BY FORCED OR INDENTURED CHILD LABOR
22.17 COMBATING TRAFFICKING IN PERSONS
24.1 PROTECTION OF INDIVIDUAL PRIVACY
24.2 FREEDOM OF INFORMATION ACT
25.1 BUY AMERICAN ACT—SUPPLIES
25.7 PROHIBITED SOURCES
28.1 BONDS AND OTHER FINANCIAL PROTECTIONS
32.1 NON-COMMERCIAL ITEM PURCHASE FINANCING
32.2 COMMERCIAL ITEM PURCHASE FINANCING
32.9 PROMPT PAYMENT
33.1 PROTESTS
43.2 CHANGE ORDERS
44.2 CONSENT TO SUBCONTRACTS
46.2 CONTRACT QUALITY REQUIREMENTS
46.4 GOVERNMENT CONTRACT QUALITY ASSURANCE
46.5 ACCEPTANCE
46.7 WARRANTIES
46.8 CONTRACTOR LIABILITY FOR LOSS OF OR DAMAGE TO PROPERTY OF THE GOVERNMENT
49.1 GENERAL PRINCIPLES
49.4 TERMINATION FOR DEFAULT

For the Federal contract exam contents, keep in mind that special emphasis has always been placed on FAR Parts 12 and 15.

Info on the following FAR Parts are strictly on a FYI basis. They are not really important for the exam: 3, 5, 18, 24, 26, 27, 28, 34, 35, 38, 39, 41, and 51.

Summary of the most popular fixed price contract types
Summary of the most popular cost contract types
Summary of other popular contract types
Contract modifications

FEDERAL GRANTS

Special Updates:

• Contracting Authority Documentations
• Contractor Documentations
• Liquidated Damages and Parent Company Guarantees
• Long Stop Dates, Compensation Events and Relief Events
• Change in Law Risk
• Concern on Subcontracting
• Step In Rights

Acquisition Planning Contents:

Special Updates:
Acquisition Planning
Procurement Planning
Contract Management Plan
The Role of a Contract Manager
Methods of Publicizing Procurement Notice
Product Description Requirements
Delivery or Performance Schedule Requirements
Alternative Dispute Resolution
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SOW, SOO and Specifications
UCF
Performance based Acquisition Planning
SSP
Market research
 

165 Review Questions on Contract Principles, Acquisition Planning, Contract Administration, Commercial Contracting, and FAR.

AND

170 Special Review Questions on Federal Contract Administration.

General Business Knowledge contents:

SAMPLE TEXT on our introduction to FAR

Contracting with the US government is based on many of the same principles as commercial contracting, although special regulations do exist to put controls in place. A commercial contract made with the US government must comply with the laws and regulations that permit it, and must be made by a Contracting Officer who has actual authority to make such contract. Along the process of entering into the contract there are tons of rules to follow. The FAR is what you need to be aware of. The URL of the official FAR is http://acquisition.gov/far/loadmainre.html.

The primary purpose of the Federal Acquisition Regulations (FAR) is to provide a uniform set of policies and procedures for acquisition. It is codified in Title 48 of the United States Code of Federal Regulations. It doesn't regulate the purchasing activities of private sector companies UNLESS parts of it are being incorporated into government solicitations and contracts by reference.

You want to know the difference between Federal Procurement and Federal Assistance. The distinction between them was established in law under the Federal Grant and Cooperative Agreement Act of 1977 (PL 95-224). That statute states that when the principal purpose of the transaction is to purchase something for the Federal government's own direct benefit or use, the federal agency must use a procurement contract. However, if the principal purpose of the transaction is to assist, stimulate or support a non-federal party in the conduct of a public program, the federal agency must use an assistance instrument in the form of a grant or a cooperative agreement.

The overall guiding principle of FAR is to have an acquisition system that can satisfy customer's needs yet minimize administrative overhead without sacrificing integrity, fairness, openness and public policy objectives. When a government agency issues a contract, a list of FAR provisions would be specified to apply to the contract. In order for a contractor to be awarded a contract, he must either comply with the provisions, demonstrate that he can comply with them at the time of award, and/or claim an exemption. Keep in mind, the FAR and the relevant agency supplements have been said by the Federal courts to have "the force and effect of law" (this is about the Christian Doctrine, that government regulations would have the force and effect of law, that government personnel may not deviate from the law UNLESS there is proper authorization), even though some agencies could be exempt.
 

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SAMPLE TEXT on our introduction to contract clauses

Damage recovery

The primary purpose of damages is at best to place the injured party in as nearly as possible the same position he/she would have been in had the contract been properly performed. Damage may be settled through monetary compensation and/or through forcing the other party to fulfill the contractual duties.

Many contracts include an agreement on a set amount of "liquidated damages" which are to be paid if something goes wrong. These are generally acceptable to the court as long as the amount indicated is a reasonable estimation of the harm. However, If the amount is too excessive the court may choose to ignore the liquidated damages clause and assess damages by actually measuring the harm financially.


NOTE: Punitive damages are generally not available in lawsuits on commercial contracts.

NOTE: Equity refers to the set of legal principles which supplement strict rules of law where their application would be too harsh for the situation, so as to achieve a sort of "natural justice." One primary distinction between law and equity is the set of remedies available. The most common civil remedy a Court of law can award is damages in $ form. Equity, on the other hand, often offers injunctions or decrees directing someone either to act or to not act.
Damages must not be too remote. If a damage is too difficult to be expected early by the parties, it is too remote. Reasonable expectation is always emphasized.

NOTE: Always include a provision which says that contract is to be enforced under the laws of a specific jurisdiction.


Generally speaking, domestic courts are bound to apply their own national law, which would usually include the relevant conflict of law rules. As suggested by Bonell (2000), according to the traditional and still prevailing view the conflict of law rules tend to restrict the choice of the law(s) applicable to international contracts to the law(s) of (a) State(s), to the exclusion of any supra-national or a-national set of rules.

Anticipatory Repudiation refers to the unjustifiable denial by a party to a contract of any intention to perform contractual duties. Such denial occurs before the time performance is due. Remedies available generally depend on how the innocent party respond. If the innocent party chooses to ignore the repudiation and proceeds with performance, the duty to mitigate damages may become an issue. The key is that nothing should be done to increase the damage.

If the innocent party insists that the other party perform, he/she may still claim damages later as long as the other party ends up choose not to perform. The simplest thing to do, however, would be to do nothing for now and to sue after the time for performance has lapsed.


Satisfaction Clause

With a "satisfaction clause", a promisor may refuse to pay if he/she isn't subjectively satisfied with the promisee's performance. Strictly speaking, the court will imply that the promisor must act in good faith in such a way that rejection of the deal is raised only if he/she is genuinely dissatisfied. In other words, a commercial contract conditioned on the satisfaction of one party is a binding one which can preclude recovery by the other party when the satisfaction clause is exercised in good faith. In many cases, dissatisfaction is not measured objectively but subjectively.

The court generally interprets satisfaction clauses using subjective standards due to the element of personal taste.

The determination of good faith usually requires the court to inquire into the party's state of mind. Showing evidence of bad faith on behalf of the party would be required in order to invalidate the satisfaction clause, which would be practically uneasy.


Contract compensation and financing

Talking about the forms of agreement in regards to compensation, a lump sum compensation is a remuneration which establishes a specific total amount payable for the performance of the contractual work. Lump sum compensation would be appropriate if you can establish with high precision the Scope, Character, Complexity and Duration of the work and that just compensation for the contractual work can be evaluated in advance with reasonable accuracy.

Cost plus net fee compensation is a form of reimbursement very popular for consultant contracts. It is basically a combination of a consultant’s actual allowable costs and the net fee as set forth in the agreement. You would want to go for this when the extent of the work cannot be well defined. Payment would be based on the actual allowable costs incurred and the completion percentage times the applicable net fee.

Rate of pay compensation is a type of remuneration which establishes a specific rate of pay in the agreement applicable for each classification of employee. You would want to use this if the indirect costs and profit would be tied directly to extent of services utilized. For this to work the contractual rates for each classification must be carefully defined.

A unit of work compensation is a form of remuneration which establishes a specific unit amount payable for each unit of services performed. It is doable when the unit cost can be determined in advance with reasonable accuracy but the number of units is indefinite. You may especially find it useful for items of additional work.

NOTE: Generally, lump sum type agreements are way more easily administered but are relatively inflexible when dealing with changes in the work. Actual cost agreements would be capable of providing more flexibility but would require relatively more administrative effort.

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