NATIONAL CONTRACT MANAGEMENT

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					                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION

                        Greater Philadelphia Chapter



                       CFCM Study Group
                                                                     an online adventure

                                                     Session #10
                                                                     August 2, 2011




DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.


Instructor:            Angie Coats, CPCM, Fellow
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter




GOVERNMENT PROPERTY
     FAR Part 45



DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                        2
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                                              New FAR Property Focus

• “New Rules” Support - Commercialization of
  Components and Equipment
• Weapons Systems, Modern Material Management
  Techniques, and Technology
• Enterprise Resource Planning
• Relational Databases
• Unique Item Identification
• Radio Frequency Tags
• Bar-Coding
• Government Property Clauses – Reduced from 19 to 3
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                        3
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                                      Government Property Clauses
• 52.245-1 GP
        – ALT I: FP for competitive contracts (Full Risk of Loss)
        – ALT II: CR for the conduct of basic or applied
          research at nonprofit institutions of higher education
          or nonprofit organizations for scientific research
• 52.245-2 GP Installation Operation Services
• 52.245-9 Use and Charges

DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                        4
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter
                                                          45.101 Definitions
                                                          45.101 Definitions
“Acquisition Cost” - Cost to Acquire Tangible Capital Asset
        –     Purchase Price
        –     Costs to Prepare for Use
        –     Placing in Location
        –     Bringing to Condition for Normal or Expected Use
“Cannibalize” - Remove Serviceable Parts
        – From One Item of Equipment
        – To Install on Another Item
“Contractor-Acquired Property”- Acquired, Fabricated
        – Otherwise Provided by Contractor
        – Performing a Contract to Which Government has Title

DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                        5
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                                                    45.101 DEFINITIONS
“Contractor Inventory” - Any Property:
   (1) Acquired by & in Possession of Contractor or Subcontractor
        – Under a Contract
        – Title Vested in Government
        – Exceeds Amounts Needed to Complete Full Performance Under Entire Contract;
     (2) Any Property - Government Obligated or it has Option to Take
        –     Under any Type of Contract,
        –     As Result of any Changes in Specifications or Plans thereunder
        –     Or of Contract Termination (or Subcontract Thereunder),
        –     Before Completion of the Work
        –     For Convenience or at Option of Government; and
     (3) Government-Furnished Property
      Exceeds Amounts Needed to Complete Full Performance under the entire contract


DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                        6
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                                                    45.101 DEFINITIONS
“Contractor’s Managerial Personnel” - Contractor’s Directors, Officers,
   Managers, Superintendents, or Equivalent Representatives who
   have Supervision or Direction of—
        – (1) All or substantially all of the contractor’s business;
        – (2) All or substantially all of the contractor’s operation at any one plant
          or separate location; or
        – (3) A separate and complete major industrial operation
“Demilitarization” - Rendering Product Unusable for, and Not
   Restorable to, Purpose Designed or Customarily Used
“Discrepancies Incident to Shipment” - Differences (e.g., count or
   condition) Between Items Documented: Been Shipped vs Actually
   Received


DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                        7
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                                                    45.101 DEFINITIONS
“Equipment” - Tangible Asset Functionally Complete for
   – Intended purpose, Durable, Nonexpendable, Needed
     for Performance
   – Equipment Not Intended for Sale
   – Does Not Ordinarily Lose Identity or Become
     Component Part of Another Article When Put into Use

Note: “Equipment” & “Material” have different characteristics
Note: Tangible = Touchable, Actual
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                        8
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter


                                                    45.101 DEFINITIONS

“Government-Furnished Property” - In Possession of, or directly
  acquired by Government
   – Subsequently Furnished by Contractor in Performance
“Government Property” - Government Owned or Leased
   – Government-Furnished Property and
   – Contractor-Acquired Property
“Material” - Property Consumed or Expended During Contract
  Performance, Higher Assembly Component Parts, Items Losing
  Individual Identity Through Incorporation Into End-Item
  Material Does Not Include Equipment, Special Tooling, and Special
  Test Equipment

DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                        9
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                                                    45.101 DEFINITIONS
“Nonseverable” - Property Unremovable After Construction or
   Installation Without:
    – Substantial Loss of Value or
    – Damage to Installed Property or Premises Where Installed
“Plant Equipment” - Personal Property of Capital Nature
    – Including equipment, machine tools, test equipment, furniture,
       vehicles, and accessory and auxiliary items
    – For use in Manufacturing Supplies
    – Performing Services
    – Administrative or General Plant Purpose
    – Does Not Include Special Tooling or Special Test Equipment

DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  10
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                   45.101 DEFINITIONS
“Precious Metals” - silver, gold, platinum, palladium,
  iridium, osmium, rhodium, and ruthenium
“Property” All Tangible Property, Both Real and Personal
  (Touchable, Actual)
“Property Administrator” - Contracting Officer’s Appointed
  Authorized Representative
        – Responsible for Administering Contract GP Requirements &
          Obligations
        – In Possession of a Contractor
“Provide” – Furnish - Government-furnished Property)
  Acquire - Contractor-Acquired Property
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                   11
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                                                    45.101 DEFINITIONS
“Real Property” - Land and Rights in Land, Ground Improvements,
   Utility Distribution Systems, Buildings and Other Structures Not
   Including:
        – Foundations;
        – Other Work for Installing Special Tooling, Special Test Equipment, or
          Plant Equipment
“Sensitive Property” - Potentially Dangerous to Public Safety OR
   Security if Stolen, Lost, or Misplaced
        – Subject to Exceptional Physical Security, Protection, Control, and
          Accountability
        – Weapons, ammunition, explosives, controlled substances, radioactive
          materials, hazardous materials or wastes, or precious metals
“Surplus Property” - Excess Personal Property Not Required by Any
   Federal Agency, Determined by GSA
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  12
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter




                              Contracting Officer
                               Responsibilities
                              Pre-Award for GP

DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  13
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter
                                        Determination to Provide GP
                                        Overarching Policy – 45.102

(a) Contractors Ordinarily Required to Furnish ALL
  PROPERTY Necessary to Perform Government
  Contracts
(b) Contracting Officers Shall Provide Property to
  Contractors Only When Clearly Demonstrated
(b)(1) In the Government’s Best Interest;
   – Example: Expedited Delivery, Small Business
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  14
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter
                                        Determination to Provide GP
                                        Overarching Policy – 45.102

 (b)(2) Overall Benefit to Procurement Significantly
   Outweighs Increased Cost of Administration, including
   Ultimate Property Disposal;
      Costs to Repair GP over Useful Life:
      Age, Condition, Potential Cost to Replace Lost,
      Damaged or Destroyed GP
      Disposition Costs: Hazardous Waste, Explosives,
      Demilitarization
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  15
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter
                                        Determination to Provide GP
                                        Overarching Policy – 45.102

(b)(3) Providing Property Does Not Substantially
  Increase the Government’s Risk; and
(b)(4) Government Requirements Cannot
  Otherwise be Met
   – Sole Source Procurements,
   – Emergency Procurements,
   – Contingency Contracting
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  16
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter
                                        Determination to Provide GP
                                        Overarching Policy – 45.102

(c) Contractor’s Inability or Unwillingness to
  Supply Own Resource = Not Sufficient
  Reason for Furnishing or Acquisition of
  Property
(d) “Exception” – For Repair or Overhaul -
  Not subject to paragraph (b)
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  17
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter


                                   Co-Determination to Provide GP



            Providing Government Furnished
              Property Must Be a Conscious
                Deliberate Thought During
                       ACQUISITION PLANNING
                                                                     Decision!
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  18
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter
                                                             45.103 General


a) Agencies shall—
(1) Allow and Encourage Voluntary Consensus standards,
   Industry-Leading Practices and Standards;
(2) Eliminate Competitive Advantage of a Contractor Using
   Government Property;
(3) Maximum Practical Reutilization - Contractor Inventory
   for Government Purposes;
(4) Require Contractors Use of Government Property in
   Possession;
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  19
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter
                                  Voluntary Consensus Standards


Contractors Manage Government Property
  Consistent with Voluntary Consensus Standards
  and Industry Leading Practices
• Common, Repeated Use of Rules,
 Conditions, Guidelines or Characteristics for
         –      Products
         –      Related Processes
         –      Production Methods
         –      Related Management Systems
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  20
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter
                                                             45.103 General


(5) Charge Appropriate Rentals When Property
  Authorized for Use on Other Than a Rent-Free
  Basis; and
(6) Contractors to Justify Retaining Government
  Property Not Needed for Contract Performance
         – Declare Excess Property No Longer Needed for
           Contract Performance

DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  21
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter
                                                             45.103 General


(b) Not Generally Require Contractors to Establish
  Property Management Systems Separate from
  Contractor’s Established Procedures, Practices,
  and Systems used to Account for and Manage
  Contractor-Owned Property



DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  22
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

       45.201(a) Solicitation Include GFP Listings
Including the following Data:
                  (1) The name, part number and description, manufacturer,
                    model number, and National Stock Number (if needed for
                    additional item identification tracking and/or disposition);
                  (2) Quantity/unit of measure;
                  (3) Unit acquisition cost;
                  (4) Unique-Item Identifier or equivalent (if available and
                    necessary for individual item tracking); and
                  (5) A statement as to whether the property is to be furnished
                    in an “as-is” condition and instructions for physical
                    inspection.
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  23
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter
                                     45.201(b) Requests of Offerors

Contractor Responsible for All Costs
  Related to Making Property Available for
  Use Such as Payment of All Costs for:
• Transportation
• Installation
• Rehabilitation Costs

DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  24
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                                     Requests of Offerors 45.201(c)
Submit the Following Information with Offers—
(1) A List or Description of All Government Property - Offeror or
     Subcontractors Propose to Use on Rent-Free Basis
–    Identify Accountable Contract where Property Held
–    Contracting Officer Authorization for use (Cognizance);
(2) Dates Property will be Available for Use (including first, last, and
     all intervening months)
–    Amount of Property Concurrent Use in Two or More Contracts
–    Sufficient Detail to Support Prorating Rent;
(3) Amount of Rent Otherwise Charged per FAR 52.245-9, Use and
     Charges; and
(4) Standards and Plans to be Used

DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  25
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter
                                           Property Management Plan
45.201 (d)
    – Status of Current Property Management System
    – Voluntary Consensus Standards in Place or Proposed for Use
    – Industry Leading Practices in Place or Proposed for Use
    – Other Performance Indicators, Metrics, Audit Results, etc.

Notes:
• Property Plan Does Not Require Government Approval
• Contractor’s Property Management Plan to be Submitted as Part of
  the Solicitation
• Some Contractors with Small Amounts of Property May NOT be
  Required to Have Complex or Elaborate Systems

DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  26
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                                                                Funding
Equitable Adjustment Under GP Clause
  Applicable:
• When GFP Identified to be Used is:
                  • Not Suitable for Use
                  • Not Delivered in Timely Basis
                  • Decreased
• When GFP Requires Repair Beyond
  NORMAL Maintenance
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  27
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                                     Funding for GP Problems
• Funding Provided for Replacing Lost, Damaged,
  Destroyed, or Stolen Government Property
• In Most Cases, the Government Acts as a Self Insurer &
  Covers the Contractor – Check the Clauses in Your
  Contract




DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  28
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter
                                                Funding for GP Actions

• Funding for Disposals
        – Demilitarization
        – Disposal of Hazardous Wastes
        – Contractors are Required by Contract to “prepare for
          shipment and deliver FOB Origin.”
                  • Anything After is Government Responsibility
• Funding for Storage
        – After Contract is Complete

DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  29
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter




     Contracting Officer and/or
     ACO GP Authority & Actions
        for FAR Part 45 are
       Described in FAR 42.3!
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  30
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

  Government Property Administrator (GPA)
• GPA Cannot Mandate Frequency of Contractor’s Self
  Assessment Practice
• Self-Assessments Based on:
        – Contractor's Management Practices
        – Applicable Industry or Voluntary Consensus Standards
• GPA May Recommend Changes to Contractor’s
  Proposed Frequency if:
        – Differs from Standards;
        – Inconsistencies Between Normal Practice and Application to
          Government Work

DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  31
                           NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                            Greater Philadelphia Chapter


                                         Other GP Clause Notes
1. Prime Contractors Responsible for Accountable GP - Including GP Located
    at Subcontractors
•        Primes Perform Periodically Reviews to Determine Adequacy of Sub’s Property
         Management System

2. Commingling Requirement - Government-Owned and Contractor-Owned
    Property
•        Material that CAN Easily Lose its identify as Government-Owned - GPA to Approve
         All Cases
•        Contractor May Co-Locate Contractor-Owned Property With Other Types of
         Government-Owned Property
          – Special Tooling, Special Test Equipment, Equipment
          – If Property Properly Identified and Secured

Such “Co-Location” Not Considered Commingling (within context of the property clause)

    DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
    upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
    the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                         www.ncmaphila.org                                                                                  32
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter




                FAR PART 46
           QUALITY ASSURANCE (QA)



DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  33
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

      FAR PART 46 QUALITY ASSURANCE (QA)
Ensure Supplies and Services Acquired
Under Government Contracts:
• Conform to Quality &Quantity Requirements
        –     Inspection
        –     Acceptance
        –     Warranty
        –     Other Measures

DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  34
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

    Subpart 46.1- General 46.101 Definitions:
"Acceptance“:
• Act of Authorized Government Representative
  for itself, or as Agent of Another
• Assumes Ownership of Existing Identified
  Supplies
• Tendered
• Or Approves Specific Services Rendered
        – As Partial Performance OR
        – As Complete Performance of Contract
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  35
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                                          46.101 QA Definitions
Conditional Acceptance”:
• Acceptance of Supplies or Services
• Not Conforming to Contract Quality
  Requirements
• Or Otherwise Incomplete

• Contractor Required to Correct or Otherwise
  Complete
  – By Specified Date
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  36
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                                     46.101 QA Definitions
“Contract Quality Requirements" - Technical
  Requirements Relating to:
• Quality of Product or Service and Contract
  Clauses Prescribing Inspection, and
• Other Contractor Quality Controls
• Assure Product or Service Conforms to
  Contractual Requirements
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  37
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                                        46.101 QA Definitions
“Critical Nonconformance“ - Nonconformance Likely to
  Result in Hazardous or Unsafe Conditions:
• For Individuals Using, Maintaining, or Depending Upon
  Supplies or Services;
• Likely to Prevent Performance of Vital Agency Mission
“Major Nonconformance“ – Supplies or Services
  Nonconformance, Other than Critical
• Likely to Result in Failure
• Or Materially Reduce Usability for Intended Purpose

DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  38
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                                     46.101 QA Definitions
“Minor Nonconformance“ –
• Not Likely to Materially Reduce Usability for
  Intended Purpose
• Departure from Established Standards - Little
  Bearing on Effective Use or Operation
“Government Contract Quality Assurance" -
  Various Government Functions, Including
  Inspection, to Determine Contractor’s fulfillment
  of Contract Obligations of Quality and Quantity
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  39
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                                     46.101 QA Definitions
“Off-the-Shelf Item” - Produced and Placed in Stock by Contractor or
   Distributor (placed), Before Receiving Orders or Contracts for its
   Sale
•    Commercial or
•    Produced to Military or Federal Specifications or Description
"Patent Defect" - Defect Exists at Time of Acceptance and is Not Latent
   Defect

Note: Patent is Discoverable - May be Open to View, be Exposed, Manifest,
   Evident or Obvious.
  Latent Defect was NOT Discoverable by Reasonable Thorough Inspection –
   Can be Discovered Years Later & Contractor be Held Liable



DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  40
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                                     46.101 QA Definitions
"Subcontractor" (see 44.101)
"Testing" - Element of Inspection that Determines
  Properties or Elements
• Functional Operation of Supplies or
  Components
• By Application of Established Scientific
  Principles and Procedures

Note: Standard Quality Assurance Requirements:
Testing - Inspection - Demonstration - Analysis
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  41
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                                                  46.102 QA Policy
Agencies Shall Ensure that-
(c) Government Contract Quality Assurance Conducted Before
    Acceptance (except as otherwise provided in this part), By or Under
    Direction of Government Personnel;
(d) No Contract Precludes Government from Performing Inspection;
(e) Nonconforming Supplies or Services Rejected: except in 46.407; &
     46.202-1
(f) Contracts for Commercial Items (FAR Part 12) Shall Rely on
    Contractor's Existing QA System
• Substitute Compliance with Government Inspection and Testing
• Before Tender for Acceptance - Unless Customary Market Practices
    for Commercial Item Permit In-Process Inspection

DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  42
                           NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                            Greater Philadelphia Chapter

                                           46.202-2 Government Reliance
                                            on Inspection by Contractor
(a)            Government Shall Rely on Contractor to Accomplish All Inspection and
               Testing to Ensure Supplies or Services Acquired At Or Below Simplified
               Acquisition Threshold (SAT) Conform to Contract Quality Requirements
               Before Tendered to Government (46.301), Except in (b) of this section
Note: Current SAT is $150000 per FAR 2.101, effective 7/25/11
(b) Government Shall Not Rely on Contractor Inspection IF:
•      CO/KO Determines Government Needs to Test in Advance of Tender for
       Acceptance,
•      Or Pass Judgment on Contractor's Internal Work Processes Adequacy
In Making Determination, CO/KO Shall Consider-
(1) Nature of Supplies and Services Being Purchased and Intended Use;
(2) Potential Losses if Defects;
(3) Likelihood of Uncontested Replacement or Correction of Defective Work; and
(4) Cost of Detailed Government Inspection
    DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
    upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
    the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                         www.ncmaphila.org                                                                                  43
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

 46.202-3 Standard Inspection Requirements - Clauses
(a) Clauses in 46.302 - 46.308, and 46.310, and
  Product and Service Specifications
(b) Clauses in (a) of this Section Provide for:
  (1) Contractor Required to Provide and Maintain
  Inspection System Acceptable to Government;
  (2) Give Government Right to Inspect & Test
  While Work in Process; and
  (3) Require Contractor to Keep Complete
  Inspection Work Records, Make Available to
  Government
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  44
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter
                     46.202-4 Higher-Level Contract
              Quality Standards Compliance Requirements
(a) Required in Solicitations and Contracts
• For Complex or Critical Items (46.203(b) and (c)) or;
• When Contract Technical Requirements Include:
    (1) Control of Such Things: Work Operations, In-Process Controls,
    Inspection; or
    (2) Attention to Factors: Organization, Planning, Work Instructions,
    Documentation Control, Advanced Metrology
(b) When Contracting Officer with Technical Personnel Input, Finds in
    Government's Interest -
• Require Higher-Level Quality Standards per 46.311 Clause
• Contracting Officer Shall Indicate Which Higher-level Quality Standards:
        –     ISO 9001, 9002, or 9003; ANSI/ASQC Q9001, Q9002, or Q9003; QS-9000; AS-9000;
              ANSI/ASQC E4; and ANSI/ASME NQA-1


DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  45
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                                    Quality Assurance Usage
Contractor Inspection                                                                    Fixed-Price Supply
     46.301                                                                                46.302
• Supplies or Services                                                                   • Supplies or Services
• At or Below Simplified                                                                   When Supplies Furnished
  Acquisition Threshold                                                                  • At or Below Simplified
        – Ensure Contractor's                                                              Acquisition Threshold
          Inspection Responsibilities
          Understood                                                                     • In Government's interest
        – Required under Agency
          Procedures
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  46
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                                            46.407 Nonconforming
                                             Supplies or Services
(a)   CO/KO Should Reject Supplies or Services Not Conforming in All
     Respects
•    Critical (See Definition: “Result in Hazardous/Unsafe”); or
•    Major (See Definition: “Other than Critical”); or
•    Supplies/Services Otherwise Incomplete, Unless Deviation
(b) CO/KO Ordinarily Must Give:
Contractor Opportunity to Correct or Replace
•    If Accomplished Within Required Delivery Schedule
•    Correction or Replacement Must be Without Additional Cost to
     Government (see exceptions)
•    Reserves Right to Charge Contractor - Cost of Government Re-
     inspection and Retests for Prior Rejection
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  47
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                                            46.407 Nonconforming
                                             Supplies or Services
(c)(1) Other Situations –
• KO May Determine Acceptance or Conditional Acceptance, or
    Rejection:
      – Reasons of Economy or
      – Urgency
• Determination Based Upon –
    (i) Technical Advice - Item Safe to Use? Will perform Intended
    Purpose?;
    (ii) Information Regarding Nature and Extent
    (iii) Contractor Request for Acceptance;
    (iv) Recommendation, with Supporting Rationale;
    (v) Contract Adjustment
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  48
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter
                                                  46.407 Nonconforming
                                                   Supplies or Services
(c)(2) Cognizant Contract Administration Office (CAO), or
   Other Government Activity Directly Involved
• Must Furnish Data to Contracting Officer
• In Writing
• Except in Urgent Cases - May Furnished Orally (Later
   Confirmed in Writing)
• Before Decision to Accept, CO/KO Must Obtain
   Concurrence of Technical Requirements Activity (Where
     Health Factors Involved, Responsible Health Official Agency)


DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  49
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                                         46.407 Nonconforming
                                          Supplies or Services
(d) If Minor Nonconformance, CAO (or CO/KO) May Make
   Determination to Accept or Reject:
• May Establish Joint Contractor - CAO Review Group
• Acceptance of Supplies and Services with Critical or Major
   Nonconformances = Outside Scope of Review Group
(e) CO/KO Must Discourage Repeated Tender of Nonconformances
• Including Those With Only Minor Nonconformances,
• By Appropriate Action
• Such as Rejection and Documenting Contractor's Performance
   Record

DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  50
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                                         46.407 Nonconforming
                                          Supplies or Services
(f) When Acceptance With Critical or Major Nonconformances (per paragraph
    (c)) - CO/KO Must Modify Contract to Provide for Equitable Price Reduction
    Or Other Consideration
• If Conditional Acceptance – Payment Amounts Withheld - At Least
    Sufficient to Cover Estimated Cost and Related Profit to Correct
    Deficiencies and Complete Unfinished Work.
• CO/KO Must Document File: Basis for Amounts Withheld
• For Services CO/KO Can Consider Identifying Value of Individual Work
    Requirements or Tasks (Subdivisions) Subject to Price or Fee Reduction
• When Minor Nonconformances Accepted, Contract Modification Not
    Required:
        – Unless Contractor Savings in Fabricating Nonconforming Supplies or Performing
          Nonconforming Services WILL Exceed Cost to Government of Processing the
          Modification
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  51
                        NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                         Greater Philadelphia Chapter
                                       46.407 Nonconforming
                                        Supplies or Services
(g) Notices of Rejection Must:
• Include Reasons for Rejection
• Be Furnished Promptly to Contractor (or Acceptance (in
   certain cases) Otherwise May be Implied as a Matter of
   Law
• Notice Must be in Writing If -
     – (1) Supplies or Services Rejected at Place Other Than Contractor's
       Plant;
     – (2) Contractor Persists in Offering Nonconformances for
       Acceptance; or
     – (3) Delivery or Performance was Late Without Excusable Cause
 DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
 upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
 the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                      www.ncmaphila.org                                                                                  52
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                        Subpart 46.501 Acceptance
Acceptance - Constitutes Acknowledgment that Supplies or Services Conform:
• With Applicable Contract Quality and Quantity Requirements
    – Except as provided in this subpart and
    – Subject to Other Contract Terms and Conditions
• May Happen Depending on Contract Terms and Conditions Provisions
    – Before Delivery,
    – At Time of Delivery
    – After Delivery
• Supplies or Services Shall Ordinarily Not be Accepted Before Completion of
   Government Contract QA Actions
• Acceptance Shall Ordinarily be Evidenced by Execution of Acceptance
   Certificate on Inspection or Receiving Report Form or Commercial Shipping
   Document/Packing List (Such as a DD250)

DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  53
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter


                                                           Acceptance
46.502 Responsibility for Acceptance – CO/KO/CAO is Binding on the
   Government
46.503 Place of Acceptance – Shall be Specified in Each Contract
• Quality Assurance/Inspection at Source Shall Ordinarily Provide for
   Acceptance at Source
• Quality Assurance/Inspection at Destination Shall Ordinarily Provide
   for Acceptance at Destination (See FAR 47.3)
• Supplies Accepted at Other Than Destination Shall Not be
   Reinspected at Destination for Acceptance
    – Should be Examined at Destination for Quantity, Damage in
       Transit, Possible Substitution or Fraud



DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  54
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter


     46.504 Certificate of Conformance (CoC)
May be Used in Certain Instances INSTEAD of Source Inspection:
• Whether the Contract Calls for Acceptance at Source or Destination)
• At Discretion of C)/KO If the following conditions apply:
(a) Acceptance on Basis of Contractor's CoC is in Government's
   Interest:
(b)(1) Small Losses Would be Incurred in Event of Defect; or
(b)(2) Because of Contractor's Reputation or Past Performance, is
   Likely that Supplies or Services Furnished - Will be Acceptable and
   Any Defective Work Would be Replaced, Corrected, or Repaired
   Without Contest
In No Case Shall Government's Right to Inspect Supplies Under
   the Inspection Provisions of the Contract be Prejudiced
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  55
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

      46.505 Transfer of Title and Risk of Loss
(a) Title to Supplies Shall Pass to Government Upon Formal Acceptance
• Regardless of When or Where Government Takes Physical Possession,
• Unless Contract Specifically Provides for Earlier Passage of Title
(b) Unless Contract Specifically Provides, Risk of Loss of Or Damage to Supplies Shall
    Remain with Contractor Until, and Shall Pass to Government Upon:
    1) Delivery of Supplies to Carrier if Transportation is F.O.B. Origin; or
    (2) Acceptance by Government or Delivery at Destination Specified in Contract,
    Whichever is Later, if F.O.B. Destination
(c) Paragraph (b) Shall Not Apply to Supplies Failing to Conform to Contract
    Requirements as to Give Right of Rejection.
    Risk Remains with Contractor Until Cure or Acceptance, then paragraph (b) Shall
    Apply
(d) Contractor Shall Not be Liable for Loss of or Damage to Supplies Caused by
    Negligence of Government Officers, Agents, or Employees Acting within the Scope of
    Employment (paragraph (b) of this section)
(e) Policy Expressed in (a) through (d) of this section is Specified in Clause 52.24616,
    Responsibility for Supplies, Prescribed in 46.316.
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  56
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

46.601 Material Inspection & Receiving Reports
Agencies Shall Prescribe Procedures and Instructions for
  Evidence of Government Inspection (46.401) and
  Acceptance ( 46.501) for:
• Use,
• Preparation, and
• Distribution
• Of
   – Material Inspection and Receiving Reports and
   – Commercial Shipping document/packing lists to
Note: DD 250 - Wide Area Work Flow (WAWF)
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  57
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                                                47.002 Applicability
All Government Personnel Concerned with:
(a) Acquisition of Supplies
(b) Acquisition of Transportation Related Services
(c) Transportation Assistance and Traffic Management
(d) Administration of Transportation Contracts, Transportation-related Services,
    Other Contracts Involving Transportation
(e) Making and Administration of Contracts With Payments From Government
    Funds for—
    (1) Transportation of Supplies;
    (2) Transportation-related Services; or
    (3) Transportation of Contractor Personnel and their Personal Belongings
     (Note: Moving Between Offices/Buildings, or for Base Realignment Purposes,
     Personal Change of Service (PCS) Relocation of Government Employees and
     Families, etc.)

DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  58
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter




                                               FAR Part 47
                                              Transportation


DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  59
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                        47.101 Policies Transportation
(a) For Domestic Shipments, the CO/KO Shall Authorize Shipments on
    Commercial Bills of Lading (CBL’s)
• Government Bills of Lading (GBL’s) May be Used for International or
    Noncontiguous Domestic Trade Shipments or When Otherwise Authorized
(b) CO/KO/CAO Shall Ensure Instructions to Contractors Result in Most
    Efficient and Economical Use of Transportation Services and Equipment
    When Available: Transportation Personnel will Assist and Provide
    Transportation Management Expertise to CAO
(c) The CO/KO Shall Obtain Traffic Management Advice and Assistance in
    Consideration of Transportation Factors:
    (1) Solicitations and Awards;
    (2) Contract Administration, Modification, Termination; and
    (3) Transportation of Property by Government To and From Contractors’
    Plants
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  60
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                                                     47.101 Policies
(d)(1) Preferred Method of Transporting Supplies for Government is by Commercial
    Carriers.
• Government-Owned, Leased, or Chartered Vehicles, Aircraft, and Vessels May be
    Used If —
    (i) They are Available and not Fully Utilized;
    (ii) Their Use Will Result in Substantial Economies; and
    (iii) Use in Accordance with All Applicable Statutes, Agency Policies and Regulations
(d)(2) If the Three Circumstances in (d)(1) Apply, Government Vehicles May be Used for
    Purposes such as—
    (i) Local transportation of Supplies Between Government Installations;
    (ii) Pickup and Delivery Services Commercial Carriers Don’t Perform in Connection
    with Line-Haul Transportation;
    (iii) Transportation of Supplies to Meet Emergencies; and
    (iv) Accomplishment of Program Objectives that Cannot be Attained by Using
    Commercial Carriers


DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  61
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter


                        47.101 Policies Transportation
(e) Agencies Shall Not Accord Preferential
   Treatment to Any Mode of Transportation or to
   Any Particular Carrier Either
(f) Agencies Shall Place with Small Business
   Concerns per FAR Part 19.
(g) Shall Comply with the Fly America Act, the
   Cargo Preference Act, and Related Statutes; Air
   Transportation by U.S.-Flag Carriers, and Ocean
   Transportation by U.S.-Flag Vessels
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  62
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                                   47.101 FOB/F.O.B. Origin
(h) When Contract Specifies Delivery of Supplies F.O.B. Origin:
• Transportation Costs to be Paid by Government,
• Contractor Shall Make Shipments on:
    – Bills of Lading, or
    – Other Shipping Documents
    – Prescribed by Military Surface Deployment and Distribution
      Command (SDDC)
    – For Seavan Containers - Either at Direction of or Furnished by
      CAO or Appropriate Agency Transportation Office
Note: F.O.B. = Free On Board or Freight On Board - Specifies Which Party
   (Buyer or Seller) Pays for Shipment and Loading Costs; Where
   Responsibility for Goods is Transferred; Liability for Supplies Lost or
   Damaged in Transit

DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  63
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                47.102 Transportation Insurance
(a) Government Generally—
     (1) Retains Risk of Loss of and/or Damage to its Property Not the Legal Liability of Commercial
     Carriers and
     (2) Does Not Buy Insurance Coverage for its Property in Possession of Commercial Carriers
     (40 U.S.C. 17307; FAR Part 28, Bonds and Insurance.)
(b) Under Special Circumstances Government May, if Considered Necessary and in Government’s
     Interest:
     (1) Buy Insurance Coverage for Government Property or
     (2) Require Carrier to
             (i) Assume Full Responsibility for Loss/Damage to Government          Property in its
     Possession and
             (ii) Buy Insurance to Cover Carrier’s Assumed Responsibility
             Cost to Carrier Shall be Part of Transportation Cost
(c)(1) If Special Circumstances for Government to Buy Insurance Coverage, CO/KO Shall Ascertain
     —
             (i) No Statutory Prohibition; and
             (ii) Funds for Insurance Are Available
     (2) CO/KO Shall Document the Need and Authorization for Insurance Coverage in the Contract
     File
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  64
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                                                         Transportation
47.103 Transportation Payment and Audit Regulation

47.104 Clauses

47.105 Transportation Assistance
(a) Civilian Government Activities that Do Not have Transportation
   Officers, or Otherwise Need Transportation Assistance, Shall Obtain
   Assistance from—
   (1) GSA Regional Federal Supply Service Bureau
   (2) Contract CAO Transportation Group
(b) Military Installations Shall Obtain Transportation Assistance from
   Transportation Office of Contracting Activity, or Other Designated
   Military Activity for Assistance, Guidance, or Data
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  65
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter




                                 FAR Part 48
                               Value Engineering


DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  66
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter


48.001 Definitions
                  Part 48—Value Engineering (VE)
“Acquisition Savings” - Savings Resulting from Application of Value Engineering Change Proposal
    (VECP)
•   To Contracts Awarded by Same Contracting Office Or its Successor
•   For Essentially the Same Unit
•   Acquisition Savings Include—
    (1) Instant Contract Savings
      – Net Cost Reductions
      – On Contract Under which VECP is submitted and accepted
      – Equal to Instant Unit Cost Reduction Multiplied by # of Instant Contract Units Affected by
          VECP
      – Less Contractor’s Allowable Development and Implementation Costs;
    (2) Concurrent Contract Savings
      – Net Reductions in Prices
      – Of Other Contracts
      – Definitized and Ongoing at Time VECP is Accepted; and


DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  67
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                  Part 48—Value Engineering (VE)
“Acquisition Savings” Continued
     (3) Future Contract Savings
        – Product of Future Unit Cost Reduction
        – Multiplied by # of Future Contract Units in Sharing Base
     On Instant Contract, Future Savings include:
        – Savings on Increases in Quantities
        – After VECP Acceptance Due to
                  •    Contract Modifications,
                  •    Exercise of Options,
                  •    Additional Orders, and
                  •    Funding of Subsequent Year Requirements on Multiyear Contract
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  68
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                                                       Definitions VE
“Collateral Costs” - Agency Costs of Operation, Maintenance, Logistic
   Support, or Government-Furnished Property
“Collateral Savings” - Resulting from VECP - Measurable Net
   Reductions in Agency’s Overall Projected Collateral Costs,
   Exclusive of Acquisition Savings, Whether or Not the Acquisition
   Cost Changes
“Contracting Office” - Any Contracting Office - Acquisition Transferred
   to (Another Agency Branch or Office Performing Joint Acquisition
“Contractor’s Development and Implementation Costs” – Contractor
   Costs Incurred on VECP specifically in:
•    Developing,
•    Testing,
•    Preparing and Submitting the VECP
•    Making Contractual Changes Required by Government Acceptance of a VECP
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  69
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                                                       Definitions VE
“Future Unit Cost Reduction” - Instant Unit Cost Reduction Adjusted as CO/KO Considers
    Necessary for Projected Learning or Changes in Quantity During Sharing Period
• Calculated at VECP Acceptance and Applied Either—
    (1) Throughout Sharing Period, Unless Contracting Officer Decides that Recalculation
    is Necessary - if Significantly Different Conditions from Previously Anticipated, or
    (2) To the Calculation of a Lump-Sum Payment, Cannot Later be Revised
“Government Costs” - Agency Costs Directly Resulting from Developing and
    Implementing VECP, such as Any Net Increases in Cost of
• Testing,
• Operations,
• Maintenance, and
• Logistics Support
Term Does Not Include:
    Normal Administrative Costs of VECP Processing or
    Any Increase in Instant Contract Cost or Price
    Resulting from Negative Instant Contract Savings (except for 52.248-3)
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  70
                           NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                            Greater Philadelphia Chapter



                                                           Definitions VE
“Instant Contract” - Contract Under which VECP is Submitted
•        Does Not Include Increases in Quantities
•        After VECP Acceptance
•        Due to Contract Modifications, Exercise of Options, or Additional Orders
•        If Multiyear Contract, Term Does Not Include Quantities Funded After VECP
         Acceptance
•        In Fixed-Price Contract with Prospective Price Redetermination - Period for which
         Firm Prices have been Established
“Instant Unit Cost Reduction” - Amount of Decrease in Unit Cost of
    Performance (without deducting any contractor’s development or
    implementation costs)
•        Resulting from Using VECP on Instant Contract
•        In Service Contracts, Instant Unit Cost Reduction Normally = # Hours Per Line-Item
         Task Saved by Using VECP on Instant Contract, Multiplied by Appropriate Contract
         Labor Rate
    DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
    upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
    the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                         www.ncmaphila.org                                                                                  71
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                                                              Definitions
“Negative Instant Contract Savings” - Increase in Instant Contract Cost
   or Price
• When VECP Acceptance Results in Excess of Contractor’s
   Allowable Development and Implementation Costs
• Over Product of Instant Unit Cost Reduction
• Multiplied by # of Instant Contract Units Affected
“Net Acquisition Savings” - Total Acquisition Savings, Including Instant,
   Concurrent, and Future Contract Savings, Less Government Costs
“Sharing Base” - # of Affected End Items on Contracts of Contracting
   Office Accepting the VECP




DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  72
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                                                              Definitions
“Sharing Period” - Period Beginning With Acceptance of 1st Unit
   Incorporating the VECP and Ending at:
• A Calendar Date Or
• Event Determined by CO/KO for each VECP
“Unit” - Item or Task to which the CO/KO and Contractor Agree the
   VECP Applies
“Value Engineering Proposal” - A-E Contract Change Proposal
   Developed by Federal Government Employees, or Contractor VE
   Personnel
• Under Contract to an Agency
• To Provide Value Engineering Services
• For the Contract or Program

DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  73
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

             48.101 General Value Engineering
(a) Formal Technique by which Contractors May:
    (1) Voluntarily Suggest Methods;
        –    For Performing More Economically and
        –    Share in Any Resulting Savings or
            (2) Be Required to Establish a Program to Identify and Submit to the Government Methods for
             Performing More Economically
             Value Engineering Attempts to Eliminate, Without Impairing Essential Functions or
             Characteristics, Anything that Increases Acquisition, Operation, or Support Costs.
(b) Two Value Engineering Approaches:
    (1) Incentive Approach –
    Voluntary Contractor Participation
    Contractor Uses its Own Resources to Develop and Submit VECP’s
    Contract Provides for Sharing of Savings and Payment of Allowable Development
    and Implementation Costs Only If VECP Accepted
    Should Not Increase Costs to Government


DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  74
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                 48.102 Procedures & Processes
(a) Agencies Shall Establish and Maintain Cost-effective VE
   Procedures and Processes
• Agencies Shall Provide Contractors a Substantial Financial
   Incentive to Develop and Submit VECPs
• Contracting Activities Will Include VE Provisions in Appropriate
   Supply, Service, Architect-Engineer and Construction Contracts,
   Except Where Exemptions are Granted on Case-by-Case Basis, or
   for Specific Classes of Contracts, by Agency Head
(b) Agencies Shall—
   (1) Establish Guidelines for Processing VECPs,
   (2) Process VECP’s Objectively and Expeditiously, and
   (3) Provide Contractors a Fair Share of Savings on Accepted
   VECPs

DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  75
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                                             48.102 VE Clauses
(c) Agencies Shall Consider Requiring Incorporation of VE Clauses in Appropriate Subcontracts
(d)(1) Agencies Other than Department of Defense Shall Use VE Program Requirement Clause
     (52.248-1) in Initial Production Contracts for Major System Programs (34.001) and Contracts for
     Major Systems Research and Development
     Except Where CO/KO Determines and Documents the File to Reflect Non Appropriate Use
    (2) In Department of Defense Contracts, VE Program Clause (52.248-1), shall be placed in initial
     production solicitations and contracts (first and second production buys) for major system
     acquisition programs as defined in DoD Directive 5000.1, except as specified in
     subdivisions (d)(2)(i) and (ii) of this section.
•    Program Requirement Clause may be included in initial production contracts for less than major
     systems acquisition programs if there is a potential for savings.
•    CO/KO Not Required to Include Program Requirement Clause in Initial Production Contracts—
     (i) Where, in the judgment of CO/KO, Prime Contractor Demonstrated Effective VE program
     During Either Earlier Program Phases, or During Other Recent Comparable Production Contracts
     (ii) Which are Awarded on Basis of Competition




DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  76
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                      48.102 VE Incentive Payments
(e) Value Engineering Incentive Payments DO NOT Constitute Profit or Fee (within the
     limitations imposed by 10 U.S.C. 2306(d) and 41 U.S.C. 254(b) (see 15.404-4(c)(4)(i))
(f) Generally, Profit or Fee on Instant Contract Should NOT be Adjusted Downward as
     Result of VECP Acceptance.
     Profit or Fee Shall be Excluded when Calculating Instant or Future Contract Savings
(g) CO/KO Determines Sharing Periods and Sharing Rates on Case-by-Case Basis
     (using the guidelines in 48.104-1 and 48.104-2, respectively)
• In Establishing Sharing Period and Sharing Rate, CO/KO Must Consider, as
     Appropriate, and Insert Supporting Rationale in Contract File:
     (1) Extent of the Change
     (2) Complexity of the Change
     (3) Development Risk (e.g., contractor’s financial risk).
     (4) Development Cost
     (5) Performance and/or Reliability Impact
     (6) Production Period Remaining - Number of Units Affected


DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  77
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter
                                               48.102 VE Policies
(h) Contracts for Architect-Engineer Services Must
  Require a Mandatory Value Engineering
  Program to Reduce Total Ownership Cost (in
     accordance with 48.101(b)(2))
• However, there Must be NO Sharing of Value
   Engineering Savings in Contracts for Architect-
   Engineer Services
(i) Agencies Shall Establish Procedures for
   Funding and Payment of Contractor’s Share of
   Collateral Savings and Future Contract Savings
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  78
                        NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                         Greater Philadelphia Chapter

48.103 Processing Value Engineering Change Proposals
(a) Instructions to Contractor for preparing and Submitting
   VECP to the Government (Paragraphs (c) and (d) of VE
   Clauses 48.2)
• Upon Receiving VECP, CO/KO or Other Designated
   Official
• Shall Promptly Process and
• Objectively Evaluate
• In Accordance with Agency Procedures and
• Shall Document Contract File with Acceptance/Rejection
   Rationale
 DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
 upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
 the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                      www.ncmaphila.org                                                                                  79
                           NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                            Greater Philadelphia Chapter

48.103 Processing Value Engineering Change Proposals
(b) CO/KO Responsible for Accepting or Rejecting VECPs
• Within 45 days from its Receipt by Government
• If More time Needed to evaluate: CO/KO Shall Notify Contractor Promptly in Writing:
            –     Giving the Reasons and
            –     Anticipated Decision Date
•        Contractor May Withdraw, in Whole or Part, any VECP Not Accepted by the
         Government Within the Period Specified in the VECP
•        Any VECP May be Approved, in Whole or Part, by Contract Modification
         Incorporating VECP
•        Until Contract Modification Effective Date, Contractor Shall Perform in Accordance
         with Existing Contract
•        If Government Accepts VECP, but Properly Rejects units Subsequently Delivered OR
         Does Not Receive Units on which Savings Share was Paid, Contractor Shall
         Reimburse Government for Proportionate Share of these Payments
•        If VECP is Not Accepted, CO/KO Shall Provide Contractor with Prompt Written
         Notification, Explaining Reasons for Rejection

    DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
    upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
    the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                         www.ncmaphila.org                                                                                  80
                        NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                         Greater Philadelphia Chapter

48.103 Processing Value Engineering Change Proposals
(c) Unilateral Government Decisions - Made Solely at Discretion of
    Government:
    (1) Decision to Accept or Reject a VECP
    (2) Determination of Collateral Costs or Collateral Savings
    (3) Decision to which Sharing Rates Apply when Alternate II of
    Clause at 52.248-1, Value Engineering Used
    (4) CO/KO’s Determination of Duration of Sharing Period and
    Contractor’s Sharing Rate

48.2—Contract Clauses



 DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
 upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
 the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                      www.ncmaphila.org                                                                                  81
                        NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                         Greater Philadelphia Chapter


FAR Part 45 GOVERNMENT PROPERTY
                                                                Questions
      "Government property" means
      a. Government-furnished property                                        b. Contractor-acquired property
      c. Surplus property                                 d. Both a & b
      ANSWER: D

FAR Part 46 QUALITY ASSURANCE
      A latent defect is a defect that
      a. Exists at the time of acceptance
      b. Cannot be discovered by a reasonable inspection
      c. Both a & b
      ANSWER: C

The government shall not use warranties in cost-reimbursement contracts.
      a. This statement is true.
      b. Except for warranties in the clauses at 52.246-3, Inspection of Supplies
      c. Except for warranties in clause 52.246-8, Inspection of Research and Development
      d. Both b and c
      ANSWER: D




 DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
 upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
 the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                      www.ncmaphila.org                                                                                  82
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter

                                                               Questions
FAR Part 47 (TRANSPORTATION)
   A person holding itself out to the general public to provide transportation for compensation is a
     a. Contract carrier
     b. Universal carrier
     c. Common carrier
     d. Commercial carrier
     ANSWER: C

FAR Part 48 (Value Engineering)
     There are two value engineering approaches, the
     a. Contractor approach and the government program
     b. Government approach and the contractor program
     c. Incentive approach and the mandatory program
     d. Mandatory approach and the incentive program
     ANSWER: C


DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  83
                       NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                        Greater Philadelphia Chapter




                     Angie Coats, CPCM, Fellow
                            ACE Solution$
                        Training & Consulting
                            210-455-9968
                        angieco241@aol.com
DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                  84
                        NATIONAL CONTRACT MANAGEMENT ASSOCIATION
                                                                                                                           ACE Solution$
                         Greater Philadelphia Chapter                                                       Angie Coats, CPCM, Fellow, M.CM and
                                                                                                           Gregg Catalano, M.Ed, L.C.D.C., L.M.F.T
                                                                                                               (210) 455-9968 angieco241@aol.com
                                                                                  LEADERSHIP/MANAGEMENT
CONTRACTS                                                                         •       Leadership in the New Millennium (4.0 - 16.0 hours)
•       Audits & Contractor Purchasing Systems Reviews (8.0 – 16.0 hours)         •       Coaching and Mentoring for Peak Performance (8.0 - 16.0 hours)
•       CARE: Contract Analysis Review and Execution (16.0 hours)                 •       Interviewing: Hiring Only the Best of the Best! (4.0 - 8.0 hours)
•       Closeouts (8.0 – 16.0 hours)                                              •       Professional Presentation and Briefing Skills (8.0 - 16.0)
•       Commerciality Determinations (8.0 hours)                                  •       The Magic Formula: Making Magic Happen for Every Customer – Every Time!
•       Compliance and Policy (8.0 – 24.0 hours)                                  •        (8.0 - 16.0 hours)
•       Contract Administration (8.0 – 16.0 hours)                                •       Team Building 4 Results (4.0 - 16.0 hours)
•       Contract Disputes and Alternate Dispute Resolution (8.0 hours)            •       Motivating Staff – It’s Easier than You Think! (2.0 - 8.0 hours)
•       Cost & Price Analysis, Estimating (Various Topics 4.0 – 24.0 hours)       •       Keeping Those Blue Chip Staff Members – Staff Retention Techniques (2.0 - 8.0 hours)
•       Data Rights (8.0 – 16.0 hours)                                            •       Life Balance - Planning - Goal Setting (4.0 - 8.0 hours)
•       Ethics, Integrity (4.0 hours)                                             •       Enhancing Your Creativity (2.0 - 8.0 hours)
•       Federal Acquisition Regulation (FAR) Parts 1-53 (16.0 hours)              •       Staff Training Made Fun (4.0 - 8.0 hours)
•       Green Purchasing (8.0 hours)                                              •       Creative Problem Solving (4.0 - 8.0 hours)
•       Grants (8.0 hours)
•       IDIQ and Task Order Contracts (8.0 – 24.0 hours)                          COMMUNICATION
•       Incentive Contracting – Where’s the Creativity? (8.0 hours)               •       “That’s Not What I Meant!” – Understanding Male & Female Communication Differences
•       Intellectual Property (8.0 hours)                                                 (4.0 - 8.0 hours)
•       Interpreting Fiscal and Funding Documents (4.0 hours)                     •       Personality Profiles - Temperament (4.0 - 8.0 hours)
•       Legal Elements of a Contract (8.0 – 16.0 hours)                                   DISC, Myers-Briggs, Understanding Your True Colors
•       Major Systems Acquisitions (8.0 – 16.0 hours)                             •       Networking Works - Professional Networking Skills (4.0 - 8.0 hours)
•       Negotiation Strategies and Techniques (16.0 – 24.0 hours)                 •       Let’s Work it Out - Conflict Resolution (4.0 - 8.0 hours)
•       Notifications and Debriefings (8.0 hours)                                 PERSONAL GROWTH
•       Performance Based Contracts (8.0 hours)                                   •       SuperCharged: Living a Happier, Healthier & More Energized Life!
•       Post Award Reviews and Team Meetings (8.0 – 16.0 hours)                           (4.0 - 8.0 hours)
•       Program and Project Management (8.0 – 24.0 hours)                         •       Stressed? Fogetta ‘bout it! Techniques, Not Just Theory for
•       Proposal Evaluation (8.0 – 16.0 hours)                                            Dealing with Daily Stress (4.0 - 8.0 hours)
•       Service Contracts (8.0 hours)                                             •       Understanding and Dealing with Burnout (2.0 - 8.0 hours)
•       Software and Information Technology Buying (8.0 hours)                    CAREER TRANSITION
•       Source Selection and Best Value (8.0 – 16.0 hours)                        •       Dealing Effectively with Organizational Change (8.0 - 16.0 hours)
•       Statements of Work (8.0 – 16.0 hours)                                     •       Life Planning – Living Your Life with Purpose (8.0 - 16.0 hours)
•       Subcontracting Plans (8.0 hours)                                          •       Pro Interviewing Skills (4.0 – 8.0 hours)
•       Supply Management Best Practices (8.0 – 16.0 hours)                       •       Getting That Job FAST - Everything You Always Wanted to Know About Job Search Skills
•       UCC and FAR (8.0 – 16.0 hours)                                                    & Were Afraid to Ask (8.0 - 16.0 hours)
•       Warranty (8.0 hours)                                                      •       Marketing U - Resume Development & Networking Skills
                                                                                     .    (4.0 - 8.0 group / 1-on-1’s)
  DISCLAIMER: This material was developed using the FAR and the NCMA BOOK to guide students through the materials for the CFCM Exam. Passing the test is incumbent
  upon a student’s study habits plus their knowledge, experience, understanding of the FAR and its concepts. The Philadelphia course is intended to help students prepare for
  the test. However, attending the Philadelphia course does not guarantee that you will pass the test.

                                                                     www.ncmaphila.org                                                                                 85

				
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