Contingency and Emergency Contracting

Responding to Hurricane Katrina

Remember Your Customer

"The emergency along the Gulf Coast is ongoing; there's still a lot of difficult work ahead. All Americans can be certain our nation has

the character, the resources, and the resolve to overcome this disaster. We will comfort and care for the victims. We will restore the towns and neighborhoods that have been lost in Louisiana,

Mississippi and Alabama. We'll rebuild the great city of New Orleans. And we'll once again show the world that the worst

adversities bring out the best in America."

-- President George W. BushSeptember 3, 2005

"If there's a place on the face of the earth that has the resources to deal with these problems

it's the United States of America, and we're going to get it done."

Vice President Dick CheneySeptember 8, 2005

New York TimesSeptember 9, 2005

Outline

• Resources

• Special Authorities

• Existing Authorities

• Planning

Performance Learning Module

Acquisition Community Connectionhttps://acc.dau.mil

Acquisition Community Connection http://acc.dau.mil/msc

Acquisition Community Connection https://acc.dau.mil/katrina

DAU Ask A Professor Specific to Hurricane Katrina

Use Special Authorities

Recent Actions

• Public Law 109-61 - Emergency Supplemental Appropriations Act to Meet Immediate Needs Arising From the Consequences of Hurricane Katrina, 2005

• Public Law 109-62 - Second Emergency Supplemental Appropriations Act to Meet Immediate Needs Arising From the Consequences of Hurricane Katrina, 2005

• Presidential Proclamation – To Suspend Subchapter IV of Chapter 31 of Title 40, United States Code, Within a Limited Geographic Area in Response to the National Emergency Caused by Hurricane Katrina

Public Law 109-61

Department of Homeland Security – “For an additional amount for `Disaster Relief', $10,000,000,000, to remain available until expended . . .”

Department of Defense – “For an additional amount for `Operation and Maintenance, Defense-Wide', $500,000,000 for emergency hurricane expenses, to support costs of evacuation, emergency repairs, deployment of personnel, and other costs resulting from immediate relief efforts, to remain available until September 30, 2006 . . .”

Public Law 109-62

Department of Defense (Military) – “For an additional amount for `Operation and Maintenance, Defense-Wide', $1,400,000,000 for emergency hurricane expenses, to support costs of evacuation, emergency repairs, deployment of personnel, and other costs resulting from immediate relief efforts, to remain available until September 30, 2006. . .”

Department of Defense (Civil) – “For an additional amount for `Operation and Maintenance' for emergency expenses for repair of storm damage to authorized projects in the Gulf states affected by Hurricane Katrina, $200,000,000, to remain available until expended. . . For an additional amount for `Flood Control and Coastal Emergencies', as authorized by section 5 of the Flood Control Act of August 16, 1941 (33 U.S.C. 701), for emergency expenses for repair of damage to flood control and hurricane shore protection projects in the Gulf states caused by Hurricane Katrina, $200,000,000, to remain available until expended . . .”

Public Law 109-62

Department of Homeland Security – “For an additional amount for `Disaster Relief', $50,000,000,000, to remain available until expended . . .”

GENERAL PROVISION

SEC. 101. For procurements of property or services determined by the head of an executive agency to be used in support of Hurricane Katrina rescue and relief operations--(1) the emergency procurement authority in subsection 32A(c) of the Office of Federal Procurement Policy Act (41 U.S.C. 428a(c)) may be used; and(2) the amount specified in subsections (c), (d), and (f) of section 32 of the Office of Federal Procurement Policy Act (41 U.S.C. 428) shall be $250,000.

Presidential Proclamation

TO SUSPEND SUBCHAPTER IV OF CHAPTER 31 OF TITLE 40, UNITED STATES CODE,WITHIN A LIMITED GEOGRAPHIC AREA

IN RESPONSE TO THE NATIONAL EMERGENCY CAUSED BY HURRICANE KATRINA - - - - - - -

BY THE PRESIDENT OF THE UNITED STATES OF AMERICA A PROCLAMATION

“NOW, THEREFORE, I, GEORGE W. BUSH, President of the United States of America, do by this proclamation suspend, as to all contracts entered into on or after the date of this proclamation and until otherwise provided, the provisions of subchapter IV of chapter 31 of title 40, United States Code, 40 U.S.C. 3141-3148, and the provisions of all other acts providing for the payment of wages, which provisions are dependent upon determinations by the Secretary of Labor under section 3142 of title 40, United States Code, as they apply to contracts to be performed in the following jurisdictions . . .”

This proclamation suspends certain provisions of the Davis-Bacon Act.

Other Statutory Citations

• 41 U.S.C. § 428a - Special emergency procurement authority

• 42 U.S.C. § 5150 – Major Disaster and Emergency Assistance - Use of local firms and individuals

• 10 U.S.C. § 101 – Organization and General military Powers – Definitions

• 10 U.S.C. § 2302 – Procurement Generally – Definitions

• Robert T. Stafford Disaster Relief and Emergency Assistance Act, P.L. 93-288, as amended

In the expenditure of Federal funds for debris clearance, distribution of supplies, reconstruction, and other major disaster or emergency assistance activities which may be carried out by contract or agreement with private organizations, firms, or individuals, preference shall be given, to the extent feasible and practicable, to those organizations, firms, and individuals residing or doing business primarily in the area affected by such major disaster or emergency. This section shall not be considered to restrict the use of Department of Defense resources in the provision of major disaster assistance under this chapter.

42 U.S.C. § 5150

Major Disaster and Emergency AssistanceUse of local firms and individuals

Contracting Thresholds

Micro-purchase

Simplified Acquisition

Commercial Item Test Program

Standard

Threshold$ 2,500 $ 100,000 $ 5,000,000

Contingency

Threshold *$ 15,000 $ 250,000 $ 10,000,000

Hurricane Katrina **

$ 250,000

* Values are greater for contracts to be performed outside of the United States.

** Authority limited to “exceptional circumstances,” requiring direct contact with OMB Deputy Director for Management

FAR - Contingency

• Subpart 2.1 - Definitions• Section 4.1102 - Policy• Part 10 - Market Research• 13.201(g) - Actions At or Below the Micro-Purchase

Threshold • 13.306(a)(1) - SF 44, Purchase Order—Invoice—Voucher. • 13.500(e)(1) - Test Program for Certain Commercial Items • 15.203(f) - Oral Solicitations• 19.903(b)(3) - Very Small Business Pilot Program • 32.1103(e) - Electronic Funds Transfer • 47.504(d)(4)(ii) and 47.507(a)(3) - Ocean Transportation by

U.S.-Flag Vessels

39 “Hits” – Not all of which are for contingency operations

FAR – “Emergency”

• Subpart 2.1 - Definitions• Section 4.1102 - Policy• 6.202 - Establishing or maintaining alternative sources• Part10 - Market Research• 6.302-3 - Industrial mobilization; engineering,

developmental, or research capability; or expert services• 6.302-5 - Authorized or required by statute• 9.206 - Acquisitions subject to qualification requirements• Subpart 11.6 - Priorities and Allocations• 15.203(f) - Oral Solicitations• 19.502-5(b) - Insufficient causes for not setting aside an

acquisition• 22.103-4(i) - Approvals of Overtime

70 “Hits” – Not all of which are for emergency operations

FAR – “Emergency”

• 22.1008-7(d) - Required time of submission of Notice (Wage Determination)

• Subpart 26.2 - Disaster or Emergency Assistance Activities• 27.208 - Use of patented technology under the NAFTA• 28.101 - Bid guarantees• 32.803(d) - Assignment of Claims set-off provision• 32.1103(e) - Electronic Funds Transfer • Subpart 42.14 - Traffic and Transportation Management• 45.404 - Rent-free use• 47.502(c) - Waiver of the Cargo Preference Act of 1954• 49.504(c)(3) - Termination of fixed-price contracts for default• 50.000 - Scope of part (Public Law 85-804)• 52.247-64 - Preference for Privately Owned U.S.-Flag

Commercial Vessels.

70 “Hits” – Not all of which are for emergency operations

Oral Solicitations

FAR 15.203(f) (f) Oral RFPs are authorized when processing a written solicitation would delay the acquisition of supplies or services to the detriment of the Government and a notice is not required under 5.202 (e.g., perishable items and support of contingency operations or other emergency situations). Use of an oral RFP does not relieve the contracting officer from complying with other FAR requirements. (1) The contract files supporting oral solicitations should include— (i) A description of the requirement; (ii) Rationale for use of an oral solicitation; (iii) Sources solicited, including the date, time, name of individuals contacted, and prices offered; and (iv) The solicitation number provided to the prospective offerors. (2) The information furnished to potential offerors under oral solicitations should include appropriate items from paragraph (e) of this section.

FAR 4.11 Central Contract Register

4.1102 Policy. (a) Prospective contractors shall be registered in the CCR database prior to award of a contract or agreement, except for— (1) Purchases that use a Governmentwide commercial purchase card as both the purchasing and payment mechanism, as opposed to using the purchase card only as a payment method; (2) Classified contracts (see 2.101) when registration in the CCR database, or use of CCR data, could compromise the safeguarding of classified information or national security; (3) Contracts awarded by— (i) Deployed contracting officers in the course of military operations, including, but not limited to, contingency operations as defined in 10 U.S.C. 101(a)(13) or humanitarian or peacekeeping operations as defined in 10 U.S.C. 2302(7); or (ii) Contracting officers in the conduct of emergency operations, such as responses to natural or environmental disasters or national or civil emergencies, e.g., Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121); (4) Contracts to support unusual or compelling needs (see 6.302-2); (5) Awards made to foreign vendors for work performed outside the United States, if it is impractical to obtain CCR registration; and (6) Micro-purchases that do not use the electronic funds transfer (EFT) method for payment and are not required to be reported (see Subpart 4.6).

FAR Subpart 26.2

26.200 Scope of subpart. This subpart implements 42 U.S.C. 5150, which provides a preference for local organizations, firms, and individuals when contracting for major disaster or emergency assistance activities (see 6.302-5).

26.201 Policy. (a) When contracting under this subpart for major disaster or emergency assistance activities, such as debris clearance, distribution of supplies, or reconstruction, preference shall be given, to the extent feasible and practicable, to those organizations, firms, or individuals residing or doing business primarilyin the area affected by such major disaster or emergency. (b) The authority to provide preference under this subpart applies only to those acquisitions, including those which do not exceed the simplified acquisition threshold, conducted during the term of a major disaster or emergency declaration made by the President of the United States under the authorityof the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121, et seq.).

Documentation

• Documentation will, generally, still be required• Review thresholds may be changed• Some documentation may be done after the fact

(e.g., Unusual and compelling urgency)• Additional documentation may be required (e.g.,

Oral Solicitations, JWOD Notification)• Additional reporting requirements are required

(Expenditure of funds)• Documentation will be subject to review

$ 15,000,000 for Inspector General

Use Existing Authorities

Don’t Think Outside of the Box , But Use All of the Box

FAR 1.1

1.102 Statement of guiding principles for the Federal Acquisition System.

(d) The role of each member of the Acquisition Team is to exercise personal initiative and sound business judgment in providing the best value product or service to meet the customer’s needs. In exercising initiative, Government members of the Acquisition Team may assume if a specific strategy, practice, policy or procedure is in the best interests of the Government and is not addressed in the FAR, nor prohibited by law (statute or case law), Executive order or other regulation, that the strategy, practice, policy or procedure is a permissible exercise of authority.

FAR Part 6

6.302-2 Unusual and compelling urgency. (a) Authority. (1) Citations: 10 U.S.C. 2304(c)(2) or 41 U.S.C. 253(c)(2). (2) When the agency’s need for the supplies or services is of such an unusual and compelling urgency that the Government would be seriously injured unless the agency is permitted to limit the number of sources from which it solicits bids or proposals, full and open competition need not be provided for. (b) Application. This authority applies in those situations where— (1) An unusual and compelling urgency precludes full and open competition; and (2) Delay in award of a contract would result in serious injury, financial or other, to the Government. (c) Limitations. (1) Contracts awarded using this authority shall be supported by the written justifications and approvals described in 6.303 and 6.304. These justifications may be made and approved after contract award when preparation and approval prior to award would unreasonably delay the acquisition. (2) This statutory authority requires that agencies shall request offers from as many potential sources as is practicable under the circumstances.

FAR Part 8

8.002 Priorities for use of Government supply sources. (a) Except as required by 8.003, or as otherwise provided by law, agencies shall satisfy requirements for supplies and services from or through the sources and publications listed below in descending order of priority— (1) Supplies. (i) Agency inventories; (ii) Excess from other agencies (see Subpart 8.1); (iii) Federal Prison Industries, Inc. (see Subpart 8.6); (iv) Supplies which are on the Procurement List maintained by the Committee for Purchase From People Who Are Blind or Severely Disabled (see Subpart 8.7); (v) Wholesale supply sources, such as stock programs of the General Services Administration (GSA) (see 41 CFR 101-26.3), the Defense Logistics Agency (see 41 CFR 101-26.6), the Department of Veterans Affairs (see 41 CFR 101-26.704), and military inventory control points; (vi) Mandatory Federal Supply Schedules (see Subpart 8.4); (vii) Optional use Federal Supply Schedules (see Subpart 8.4); and (viii) Commercial sources (including educational and nonprofit institutions). (2) Services. (i) Services which are on the Procurement List maintained by the Committee for Purchase From People Who Are Blind or severely Disabled (see Subpart 8.7); (ii) Mandatory Federal Supply Schedules (see Subpart 8.4); (iii) Optional use Federal Supply Schedules (see Subpart 8.4); and (iv) Federal Prison Industries, Inc. (see Subpart 8.6), or commercial sources (including educational and nonprofit institutions). (b) Sources other than those listed in paragraph (a) of this section may be used as prescribed in 41 CFR 101-26.301 and in an unusual and compelling urgency as prescribed in 6.302-2 and in 41 CFR 101-25.101-5.

FAR Part 13

13.302-2 Unpriced purchase orders. (a) An unpriced purchase order is an order for supplies or services, the price of which is not established at the time of issuance of the order. (b) An unpriced purchase order may be used only when— (1) It is impractical to obtain pricing in advance of issuance of the purchase order; and (2) The purchase is for— (i) Repairs to equipment requiring disassembly to determine the nature and extent of repairs; (ii) Material available from only one source and for which cost cannot readily be established; or (iii) Supplies or services for which prices are known to be competitive, but exact prices are not known (e.g., miscellaneous repair parts, maintenance agreements). (c) Unpriced purchase orders may be issued on paper or electronically. A realistic monetary limitation, either for each line item or for the total order, shall be placed on each unpriced purchase order. The monetary limitation shall be an obligation subject to adjustment when the firm price is established. The contracting office shall follow up on each order to ensure timely pricing. The contracting officer or the contracting officer’s designated representative shall review the invoice price and, if reasonable (see 13.106-3(a)), process the invoice for payment.

13.303 Blanket purchase agreements (BPAs).13.303-1 General. (a) A blanket purchase agreement (BPA) is a simplified method of filling anticipated repetitive needs for supplies or services by establishing “charge accounts” with qualified sources of supply (see Subpart 16.7 for additional coverage of agreements). (b) BPAs should be established for use by an organization responsible for providing supplies for its own operations or for other offices, installations, projects, or functions. Such organizations, for example, may be organized supply points, separate independent or detached field parties, or one-person posts or activities. (c) The use of BPAs does not exempt an agency from the responsibility for keeping obligations and expenditures within available funds.

FAR Part 13Subpart 13.5—Test Program for Certain

Commercial Items

13.500 General. (a) This subpart authorizes, as a test program, use of simplified procedures for the acquisition of supplies and services in amounts greater than the simplified acquisition threshold but not exceeding $5 million ($10 million for acquisitions as described in 13.500(e)), including options, if the contracting officer reasonably expects, based on the nature of the supplies or services sought, and on market research, that offers will include only commercial items. Under this test program, contracting officers may use any simplified acquisition procedure in this part, subject to any specific dollar limitation applicable to the particular procedure. The purpose of this test program is to vest contracting officers with additional procedural discretion and flexibility, so that commercial item acquisitions in this dollar range may be solicited, offered, evaluated, and awarded in a simplified manner that maximizes efficiency and economy and minimizes burden and administrative costs for both the Government and industry (10 U.S.C. 2304(g) and 2305 and 41 U.S.C. 253(g) and 253a and 253b).

GWACs, MACs, IAs

• GSA Federal Supply Schedule Program

• Governmentwide Acquisition Contract (GWAC)

• Multi-agency contract (MAC)

• Interagency Acquisition

Using existing contract vehicles can save time and effort

FAR Part 16

16.203 Fixed-price contracts with economic price adjustment.

16.205 Fixed-price contracts with prospective price redetermination.

16.207 Firm-fixed-price, level-of-effort term contracts.

Subpart 16.3—Cost-Reimbursement Contracts

Subpart 16.4—Incentive Contracts

Subpart 16.5—Indefinite-Delivery Contracts

Subpart 16.6—Time-and-Materials, Labor-Hour, and Letter Contracts

Planning

For now, and for the future

Acquisition Planning

• Requirements of FAR Part 7, Acquisition Planning, do not go away

• Acquisition planning requirements may be changed to meet expedited timelines under FAR 7.103 Agency-head responsibilities

• Lack of acquisition planning is a frequent criticism in reviews of contingency and emergency contracting

Continuity of Operations Plan

1. Upon notification of requirement to implement COOP, the Chief, Acquisition & Property Management Division (APMD) will identify the individual(s) who will provide procurement support either on-site or from headquarters during the emergency.

2. Chief, APMD or Chief, Contracts & Simplified Acquisitions Branch or Chief, Acquisition Management Branch will request the Bank Card Center to authorized the emergency issuance of Government purchase cards within 24 hours. [Note: Currently 3 contracting officers in APMD hold purchase cards.]

3. Affected office will identify point of contact for APMD to coordinate with during the emergency. 4. Affected office will identify to the procurement support person (contracting officer) the BASIC

supplies and/or services required to restore basic services to complete their mission. 5. The contracting officer will identify sources for the required supplies or services and procure them

using the purchase card. If vendor will not accept purchase card, contracting officer may issue an emergency purchase order. If time permits, contracting officer may process an expedited purchase order manually or through the automated procurement system, Procurement Desktop (PD).

6. The contractor will deliver the ordered supplies/services to the location identified (FOB destination) or we may want to pick up the supplies order (FOB origin).

7. Contracting Officer will keep a log of all procurement actions processed.8. Affected office will ensure that supplies or services are received and documentation of accountable

property is forwarded to Materiel Management Branch to be entered into the accountable property inventory system.

9. Affected office will identify ADVANCED services required and process expedited requests for purchase of supplies or services (requisitions) through the normal process. APMD will process requisitions in an expeditious manner.

DoT Emergency Contracting Tool Kit

At a minimum, each Emergency Contracting Tool Kit must contain the following:

•A list of companies most likely to be contacted during an emergency situation to provide supplies or services. The list should include the name, telephone number, address and point(s) of contact for these companies. •A Governmentwide commercial purchase card in the name of a Contracting Officer who has an unlimited warrant (see TAM 1213.301). Contracting activities with contracting authority that does not exceed $100,000 are exempt from this requirement. •A list of at least 10 contract numbers and 10 purchase order numbers "reserved" for emergency use. •At least five "blank" SF1449s Solicitation/Contract/Order for Commercial Items with instructions for critical entries, such as the billing address, order number, and accounting •At least five "blank" Letter Contracts (see FAR 16.603) which can be completed "by hand." •At least 10 template justifications for other than full and open competition for use under emergency conditions, which can be completed "by hand." See FAR 6.302 for the authorities for other than full and open competition. •A list of persons (including their emergency contact telephone numbers) within the organizational element, who are authorized to approve justifications. The list must be approved at a management level above the Chief of the Contracting Office. •A list of persons at the contracting activity and Headquarters level who are authorized to provide contracting officers oral and/or written approval to obligate funds in the event of emergencies.

It is recommended that each Emergency Contracting Tool Kit include:

•A laptop computer with access to the Internet and a printer. •Several Convenience Checks that can be ordered using Bank of America's EAGLS. •A copy of the organizational element's emergency policies and/or procedures, including the element's and M-60's streamlined process for obtaining individual or class waivers/deviations to the FAR, TAR and TAM (see below). •A list of home and/or cell phone numbers of likely contacts, including other Contracting Officers and program officials. •A list of persons, and their emergency phone numbers, in major program offices who are authorized to use the Governmentwide commercial purchase card. •A list of Governmentwide agency contracts for the acquisition of support services and Federal Supply Schedules that could be used in emergency situations. The listing should include the name and telephone number of the points of contact for these contracts. •Templates (see Forms SF-1449, OF-336, and OF-347) for purchase orders. •Templates (see forms SF-26, SF-33, and OF-307) for both fixed-price and cost-reimbursement type contracts. FAR 15.509 applies. These should include separate templates for supplies, services and construction. •A hard or electronic copy of the "most likely to be used" FAR, TAR and TAM parts (e.g., Parts 6, 13, 15, 16 and 19). Also, the names, including telephone numbers of OST, M-60 procurement analysts and their assigned FAR parts. See website: http://www.dot.gov/ost/m60/earl/listparts.htm.

Additional Information

The lessons below are from the DAU Contingency Contracting Course and are available on the ACC Hurricane Katrina

Resources Web Page:

Lesson 8 – Funding Contingency Operations

Lesson 9 – Contractual Instruments

Lesson 10 – Administration, Termination, and Close-Out of Contingency Contracts

Remember Your Customer