Table of Contents
Chapter 3 Contracts In General
Mailing List
Contractors wishing to secure reforestation contracts must submit their names to the Forest Service and the Bureau of Land Management to be placed on a mailing list. Once the contractors are on the mailing list they are notified of the contracts being offered to the general public. The Federal Government recommends that contractors subscribe to the "Commerce Business Daily" if they want notification of solicitations in excess of $25,000, since this publication contains Government-wide procurement opportunities.
The Federal agencies maintain a separate mailing list used to notify the contractors of contracts under $25,000 which are being offered. Contractors wishing to be notified of contracts under $25,000 must submit their names to the local offices of each agency. To secure information on contracts under $25,000, you will need to contact each of the Forest Service offices or BLM offices in your State.
The same is true with the State of Oregon Forest Service. General Services issues contracts in excess of $15,000, and Contracting Officials are granted the authority to issue contracts under $15,000. The State also maintains two separate mailing lists; one is maintained by General Services and the other is maintained by the Contracting Officials.
Solicitation Methods
- Invitation for Bids (IFB)
A solicitation method which requires a prospective contractor to submit a sealed bid. The bids are then opened at a public bid opening. Bids are considered a firm offer and cannot simply be withdrawn after the opening. Contracts are awarded . to the lowest bidder.
IFB is used for all solicitations in excess of $25,000, and constitute the largest percentage of the contracts awarded.
- Request for Proposal (RFP)
A solicitation method used with competitive negotiation for procurement. If you are making an offer in response to a RFP, you may withdraw your offer at any time before the contract is awarded. There is no public bid opening with this solicitation method.
RFP is normally used for solicitations under $25,000. The Contracting Official will determine whether on not to use either a RFP or RFQ (below).
- Request for Quotations (RFQ)
A solicitation method that includes a request for price information. An RFQ may be either oral or written. If written quotes are required, no public opening is held. Quotes are reviewed and awards are made based on the quote which will be most advantageous to the Government, the lowest bid.
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Contract Contents
The Federal agencies follow applicable Federal regulations when developing the schedules and general provisions of any pre-commercial thinning or tree planting contract. Therefore, you will find specific information contained within all contract solicitation packages. The following is a typical table of contents from a contract solicitation package:
| Section A |
Solicitation, Offer and Award |
| Section B |
Continuation Sheet |
| Section C |
Specifications Tree Planting |
| Section D |
Inspection/Acceptance/Payment |
| Section E |
Inspection/Acceptance/Payment |
| Section F |
Delivery/Performance Tree Planting |
| Section G |
Contract Administration |
| Section H |
Special Contract Requirements |
| Section I |
Service Contract Clauses |
| *Section J |
Wage Determination and Fringe Benefits |
| *Section K |
Representations, Certifications, and Other Statements of Offerors |
| *Section L |
Instructions, Conditions, Notice to Offer |
The sections marked with the "*" will contain information that may be helpful in completing your audit. In these sections you will be able to find social security numbers, employer identification numbers, addresses, entity information, bonding company information, the taxpayer's average annual receipts for the prior 3 fiscal years, if applicable, and names, addresses, EIN, and labor license numbers of reported parent companies.
The Contract Officials may be able to provide you with more information on the contractor you have under audit which will be helpful in completing your audit. The following is a listing of information that can be obtained from Federal agencies and more than likely from State agencies, so check with them.
- A listing of payments made on each contract.
- The inspector's report listing the crew foreman and individuals working on the contract during the job site inspection.
- The hourly rate, required by the Service Contract Act, payable to each employee.
- A copy of the job bid submitted by the contractor, (in most cases).
- A copy of the Government's estimate of the costs to complete the contract, (in most cases).
- The Government's estimate of the number of employees needed to do the job and the hours needed to complete the contract.
The information retained by the Federal and State agencies can be obtained without a summons. However, .you must supply the agency with as much information about the contracts as you can, (that is, contract number, the location of the contract, or the office that issued the contract). This is important because each Federal agency maintains only those records which pertain to the contracts they have awarded. To get the information on all the contracts worked by your contractor most likely will require contacting several different offices.
Probably the most important item that can be obtained from the Federal agency is a copy of the contractor's job bid. Remember that the job bid becomes the amount for which the contract is awarded -- that is, gross income received by the contractor. The job bid may also help you to determine if the costs reported on the return are reasonable.
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Delivery/Performance Requirements
Once a contract has been awarded, the Contract Officer Representative (COR) will issue the contractor a written notice to proceed. The contractor shall perform no preliminary work prior to receipt of the written notice to proceed. The contractor shall begin work within the specified number of days from the effective date of the notice to proceed. The contractor shall continue performance of the work according to the time specified within the Schedule of Items. Failure to do so may be cause for action under the "Default" clause.
At the pre-work conference, the contractor shall provide to the COR a written "work progress plan" which details his or her work force and his or her proposed schedule for completion of the work, within the contract performance time. The work schedule will be used as a guide to measure the contractor's performance as well as to calculate such things as the rate of tree delivery to meet the contractor's needs to ensure the timely completion of the contract. If the contractor's progress falls behind 20 percent of the established work schedule, the contractor's right to proceed may be terminated for default unless satisfactory progress is attained within 3 working days of the receipt of the written notice of deficient performance.
The COR is the on-the-ground administrator for the Contract Official. The COR is authorized to clarify technical requirements, and to review and approve work within the scope of the performance of the contract. The COR has the authority to designate a Project Inspector to determine whether or not the contractor has complied with the technical specifications, drawings, work schedule, and labor provisions at the work site.
At the pre-work conference, the Contract Official or the COR will make sure that each contractor understands, among other things, that the individuals performing the work are employees and are governed by statutory and regulatory laws pertaining to the reforestation industry. Some Contract Officials or CORs will have a special checksheet for the pre-work conference; you will find a copy of an actual checksheet used by a Contract Official, see Exhibit 3-1. This checksheet may be helpful in convincing the prime contractor that his or her workers are employees and do not qualify as subcontractors. Please refer to the employee section for further discussion of employees and laws applicable to the reforestation industry.
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Payments
All vendor payments of $25,000 or more must be made through the Treasury Financial Communication System (a wire transfer system). Beginning sometime after December 31, 1988, and before December 31, 1989, contractors successful in obtaining contracts were required to supply certain financial institution information, (bank account numbers), to the Federal Government so their contract payments could be deposited directly to their bank account.
Contractors normally receive more than one payment during the performance time of the contract. According to Contract Officials, the contractors are paid approximately every 2 weeks and the amount of the payment is based on the work done, determined by the percentage of completion. However, it takes approximately a month from the time the contractor begins work on a contract until he or she receives the first payment.
Keep in mind, the duration of a contract is relatively short. In other words, once the contract is awarded it is usually started within 2 to 3 weeks and completed within another 2 to 4 weeks, depending on the size of the job. The Forest Service keeps the duration of the contracts short since they are concerned about planting the trees at a time which will ensure the highest rate of survival among the new seedlings.
You may find that the contractor has deposited funds into his or her business account that he or she does not consider to be taxable. Reforestation contractors are able to secure advances from their bank by assigning the income from the contracts that they have been awarded. For a discussion on assignment of income see Chapter 6, of this audit guide.
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Exhibit 3-1 (1 of 6)
Checksheet Used by Contract Official
Prework Conference Guide (Service Contract)
PROJECT:___________________________CONTRACT NO:____________________
CONTRACTOR:________________________FOREST:_________________________
COR:_______________________________INSPECTOR_______________________
A prework conference was held at:__________________________________
and was attended by the following:
Forest Service:
Contractor:
__________________________presided over the meeting and the
following items were discussed:
FOREST SERVICE ORGANIZATION
A. General
Only the Contracting Officer, the Administrative Contracting
Officer (ACO), or Contracting Officer's Representative (COR)
have authority with respect to this contract. Other Forest
Service officials may visit the work site from time to time.
However, the Contractor is warned that payment cannot be made
for any costs incurred as a result of a response to an order
or instruction issued by someone other than the Contracting
Officer, ACO, or COR. The only exception to this is the case
of a forest fire. While a direct line of communication is
always open to the Contracting Officer, or ACO, all
correspondence and other communications should normally be
directed to the COR.
B. Contracting Officer
The Contracting Officer has full authority for the
administration of the contract and will personally handle all
matters beyond the authority of the COR or ACO.
C. Administrative Contracting Officer
An ACO has/has not been designated for the contract.
The ACO is authorized to take all actions necessary for
administration of the contract within applicable laws and
regulations, except for final decisions under the Disputes
Clause, termination for default or convenience, and final
acceptance of the services rendered. This includes signatory
authority for Contract Modifications up to the limits stated
in the letter of designation.
R6-FS-6300--61 (9/84)
Exhibit 3-1 (2 of 6)
D. Contracting Officer's Representative
The COR is the on site contract administrator for the Contracting
Officer, whose duties and responsibilities are defined in the
letter of designation. Generally, this includes fill authority
for the day-to-day administration of the contract, except for
matters pertaining to changes in contract price and time.
E. Inspector(s)
The COR may designate Inspectors who are responsible for checking
Contractor's compliance with the technical specifications, work
schedule, and labor standards of the contract. Contractor will
receive a copy of Insepctor Designation Letter(s). Copies will
be/were distributed.
PERFORMANCE
F. Contract Time
Contract time specified for this project is_________________
calendar days. Contract time will be accounted for on a claendar
day basis, including Saturdays, Sundays, and holidays, and will
run continuously from the effective date of the Notice toProceed
to the date of completion of the work, unless work is suspended
by the COR. Work suspension may be partial or total. Normally,
the count of contract time will cease when work is totally suspended.
During period of partial suspension, count of contract time will
continue, however, an appropriate adjustment will be made in the
contract time. Notice to Proceed was/will be effective
____________________.
G. Progress Schedule
A Proposed Progress Schedule, showing the proposed sequence of
work and the anticipated date of completion, was prepared on
form r6-6320-18 and copies were distributed/are attached:
or,
The COR and Contractor agreed to use a daily rate of production
using the following formula in lieu of preparing form R6-6320-18:
Total Contract Units = Units Daily Production
Total Contract Days
Daily Production shall be___________________units
(acres, miles, etc.)
ADMINISTRATION
H. Superintendence
In the absence of the contractor, there shall be an authorized
representative of the Contractor on the project at all times
when work is in progress. Contractor submitted letter designating
representative(s), and the extent of his/her/their authority.
Copies were distributed/are attached.
I. Permists and Reponsibilities for the Work
The Contractor is reponsible for obtaining any applicable licenses
and permits and must comply with all Federal, State, and local
regulations, laws and codes.
Exhibit 3-1 (3 of 6)
J. Camping Permits
The Contractor does/does not intend to camp on National Forest
lands. Forest Service permits will specify restrictions regarding
campsites and sanitary provisions. Combustible refuse, resulting
from lunches, etc., may be burned if authorized by District Ranger.
All noncombustible materials, cans bottles, etc., shall be removed
from Forest land.
K. Payments
Progress payments will be made monthly as the work proceeds, or
at more frequent intervals, if approved by the Contracting Officer.
Progress payments will be initiated by the COR on the ______ day
of each month.
Following completion and acceptance of the work, the Contractor
shall be paid upon presentation of a properly executed voucher and
a release of all claims agains the Government, other than claims
in stated amounts specifically excepted by the Contractor on the
release form.
L. Fire Prevention and Control
Specific fire prevention measures were briefly/thoroughly
discussed including fire period, precautionary measures, and
fire tools. The COR is responsible for obtaining any fire
requirement waivers, authorized by the District Ranger.
CONTRACT CLAUSES
M. Changes
The Contracting Officer may, by writeen Change Order, make any
change within the general scope of the contract, including but
not limited to: changes in specifications; in method or manner
of performance of the work; in Government-furnished facilities,
equipment, materials, services or site; and direct acceleration
in the performance of the work.
N. Disputes
This clause prescribed definite procedures to be followed in
cases of disputes arising between the Contractor and the
Government. Except as the parties may other wise agree,
pending final resolution of a claim, the Contractor shall
proceed diligently witht he performance of the contract and
in accordance with the Contracting Officer's decision.
O. Termination for Default; Damages for Delay; Time Extensions
If the Contractor refuses or fails to prosecute the work with
such diligence as will ensure completion within the time specified,
the Government may terminate the Contractor's right to proceed.
Whether or not the Contractor's right to proceed is terminated,
the Contractor shall be liable for any damage to the Gevernment
resulting from the refusal or failure to complete the work within
the specified time,
P. Property and Personal Damages
The Contractor shall use every precaution necessary to prevent
damage to public and private property. The Contractor shall be
reponsible for all damage to property and persons that occur as
a result of his/her or his/her agent's or employee's fault or
negligence.
Exhibit 3-1 (4 of 6)
LABOR STANDARDS PROVISIONS (Statutory and regulatory
requirements pertaining to labor)
Q. Equal Opportunity
The Contractor agrees that he/she will not discriminate against
any employee or applicant for employment because of race, color,
religion, sex or national origin and will take affirmative action
to ensure that applicants are employed, and are treated during
employment, without regard to race, color, religion, sex or
national origin.
In the event of noncompliance with the Equal Opportunity
provisions, the contract may be canceled, terninated or suspended,
in whole or in part, and the Contractor may be declared ineligible
for further Goverment contracts. The Contractor must include the
Equal Opportunity provisions in every subcontract. The Equal
Employment Opportunity Poster will be/was given to the Contractor,
with instructions to post in conspicuous places, available to all
employees and applicants for employment.
R. Service Contract Act of 1965
All service employees employed in the performance of the contract
shall be paid not less than the minimum monetary wage and shall
be furnished fringe benefits in accordance witht he Wage
Determination Decision.
The Wage Determination Decision, along with the Wage Rate Poster
WH-1313, Notice to Employees working on Government Contracts,
shall be posted in a location where it may be seen by all
employees performing on the contract.
The Contractor shall make and maintain, for three years from
completion of the work, records of each employee's name, address,
work classification, wages paid and fringe benefits provided,
hours worked and any deductions from compensation.
S. Contract Work Hours and Safety Standards Act
Laborers, mechanics, apprentices, trainees, watchpersons and
guards shall be paid at least one and on-half times their basic
rate of pay for all hours worked in excess of 8 hours a day or
40 hours a week, whichever is the greater number of overtime hours.
T. Safety and Sanitary Working Conditions
The Contractor shall not permit the services called for by
the contract to be performed in surroundings or under working
conditions, under the Contractor's control, which are unsanitary
or hazardous or dangerous to the health or safety of employees
engaged in the work. The Safety and Health Protection on the
Job poster was given to the Contractor with instructions to
post at the work site.
Exhibit 3-1 (5 of 6)
U. Federal Procurement Regulations
1. Part I, Section C of the contract contains both the general
and technical specifications.
2. Part I, Section E deals with inspection and acceptance.
Of special note is Clause 52.246-4, Inspection of Services,
Fixed Price. This clause provides, among other things,
that the contractor will provide and maintain an inspection
system and records acceptable to the Government covering
services under this contract.
3. Part I, Section H contains special contract requirements.
4. Part I, Section I contains clauses incorporated by
reference. The full text is available in the Federal
Register. Complete copies can be purchased from the
Superintendent of Documents, Government Printing Offices,
Washington, DC 20402. All applicable referenced clauses
are a part of this contract.
Other Items Discussed
The specifications and inspection procedures of this contract
were jointly reviewed by the Contractor and the COR.
______________________________________ Date___________________
____________________________________ Date___________________
(Contracting Officer's Representative)
Exhibit 3-1 (6 of 6)
EXPERIENCE QUESTIONNAIRE
1. How many years experience as a Prime Contractor do you have?
If this is your first contract as a Prime Contractor, what
experience have you had either as a subcontractor or employee?
2. List your recent contract experience relating to reforestation?
Contract Amt Type of Project Date Completed Contact Person
3. What contracts do you currently have?
4. How many personnel will be assigned to this project?
a. Who will be your forperson(s) and what is their experience?
b. Who will be responsible for self-inspection and what are
their qualifications?
5. In the event you fail to meet progress, how will you correct
this problem?
6. Are there any problems you may foresee with this contract?
If so, explain.
7. Are you aware of the applicable Service Contract Act wage
rate for this contract?
8. Have you ever defaulted on a reforestation project?
If so, explain.
9. Did you visit the job site or talk with anyone regarding
the project?
10. A copy of the bid abstract listing the awarded contractors
has been sent to the State of Oregon's Workmen's Compensation
Bureau and U.S. Department of Immigration. You may be contacted
by them
______________________________
Contractor
______________________________
Title
______________________________ ____________________
Solicitation No. Contract No.
______________________________
Date
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