Contracting - Procurements Methods

Contracting with the Forest Service

The USDA Forest Service, Northern Acquisition Management Center manages two National Forests and two National Grasslands in New Mexico and parts of Oklahoma and Texas. The Forest Service offices throughout New Mexico annually purchase various goods and services totaling several million dollars.

Contracting Officers and Purchasing Agents in the Supervisor's Offices and Business Management Officers at the Ranger District Offices handle acquisition of goods and services. Forest Service procurements are guided by the Federal Acquisition Regulation, referred to as FAR, and other U.S. Department of Agriculture and Forest Service rules and regulations. These rules and regulations are different from private contracting practices, and are based on public laws instead of the Uniform Commercial Code.

Here is a brief overview of how to contract with the Forest Service. Government contracts do contain numerous clauses that relate to a large number of laws and regulations. However, in most cases, a government contract has no more performance requirements than a prudent contractor would find in nongovernmental contracts. Bidders and potential contractors must be prepared to meet the terms and conditions set forth in the contract, and must base their costs on the amount of equipment, labor and material that will be needed to do the job, allowing for fair and reasonable profit.

There are three basic types of contracts: construction, service, and supply. Each is described in detail below.

Service Contracts

A service contract is one that directly engages the time and effort of a contractor whose primary purpose is to perform an identifiable task (rather than to furnish an end item of supply). Typical services that may be contracted for include:

· Tree Planting

· Architecture/Engineering

· Tree Thinning

· Audiovisual Production

· Equipment Rental

· Janitorial

· Exhibits or Graphics

· Archeology

· Writing

· Road Maintenance

· ATVs

· Snowmobiles

· Drink Tanks

Many of the same safety and labor laws and regulations that apply to construction contracts also pertain to service contracts.

Service Contract Act of 1965

As amended, (41 U.S.C. 351-358) - This act requires that, in service contracts over $2,500, contractors shall pay not less than the minimum wage set forth in the wage decision listed in the solicitation package. If under $2,500, the contractor must pay not less than the minimum wage in effect at the time of the award.

Bonds

Performance and payment bonds are not usually required for a service contract. However, a contracting officer may require bonds if over $25,000 and in the government's best interest. Other clauses are included in solicitations as applicable, and bidders are responsible for understanding and meeting these requirements.

Supply Contracts

A supply contract is for the furnishing of a commodity, product or equipment. This also includes the manufacture, fabrication or processing of raw material into a finished product, and may also include procurement of raw materials. Some typical Forest Service supply contracts include:

· Gravel (stockpiled)

· Fertilizer

· Cattleguards

· Wooden Fence

· Culvert

· Trailer Houses

· Posts (various types)

· Fabricated Metal

· Lumber

· Communications Equipment

· Pipe (various types)

Walsh-Healy Public Contracts Act

(41 U.S.C. 35-45) - This act requires that if a supply contract exceeds $10,000, the contract shall:

Be with manufactures or regular dealers in the supplies manufactured or used in performing the contract.

Include or incorporate by reference the representation that the contractor is a manufacturer or a regular dealer of the supplies offered and also includes the stipulation required by the Act pertaining to such matters as minimum wages, maximum hours, child labor, convict labor and safe and sanitary work conditions.

Required Sources for Supplies

Many supplies used by the Forest Service must be purchased from sources such as Federal Prison Industries, Inc.; the blind and severely disabled; the U.S. Government Printing Office; GSA stores stock and Federal Supply Schedules. GSA Federal Supply Schedules are contracts with private business firms for items commonly used by government agencies. This can include items from pencils and paper to computers and equipment.

Construction Contracts

A construction contract is one that involves the construction, alteration or repair (including excavating and painting) of buildings, structures or other real property. Some of the common examples of Forest Service construction include:

· Buildings

· Trails

· Visitor Facilities

· Roads

· Dams

· Fences

· Campgrounds

· Sewer and Water Lines

· Bridges

· Well Drilling

· Stock Ponds

Some of the more important laws and regulations governing construction contracting are:

Miller Act

(40 U.S.C. 270a-207f) This act requires performance and payment bonds (usually 100% performance and 100% payment bonds of the original contract price, respectively) for any construction exceeding $100,000. A bid bond (usually 20% of bid price) shall accompany the bid when required by the solicitation.

Davis-Bacon Act

(40 U.S.C. 276a-276a-7) This act requires that contractors pay specific minimum wages if the construction contract exceeds $2,000. A copy of the applicable wage determinations will be included in the solicitation package.

Small Business Administration Laws and Regulations Pertaining to Small Business Concerns

The Small Business Administration assists small businesses through various laws and regulations. Agency contracting personnel strive to ensure that a fair proportion of contracts are placed with small business. Some of the methods used to accomplish this include:

Set-Asides For Small Business

As previously stated, many Forest Service contracts are set-aside exclusively for small business concerns. The Small Business Administration establishes small business size standards on an industry-by-industry basis.

Section 8(a) of the Small Business Act

This section established a program that authorizes the Small Business Administration to enter into all types of contracts with other agencies and let subcontracts for performing these contracts to firms eligible for program participation (small disadvantaged business concerns). It is the responsibility of each agency to identify potential 8(a) Set-Aside projects.

Small Business Act Minority/Women-Owned Business Program

If a contract is over $100,000, the contractor must agree to use its best effort to give minority/women-owned small business the maximum practicable opportunity to participate pate in the subcontract it awards. Those interested in learning more about the Small and Disadvantaged Business Program may contact:

Unites States Government
Small Business Administration
625 Silver SW, Suite 320
Albuquerque, NM 87102
(505) 346-7909

HUBZONE

The Federal Government will be limiting competition on some of its contracts to those contractors that are certified under the new HUBZONE Program. Those contractors interested in continuing business with the Federal Government, including the Forest Service, would benefit from determining their status as a HUBZONE contractor.

The Contracting Offices will be implementing the Small Business Reauthorization Act of 1997 - specifically the HUBZONE Empowerment Program this fiscal year. The program has been enacted into law to promote economic development and employment growth in distressed areas by providing Federal Contracting opportunities to those firms that are HUBZONE certified by the Small Business Administration. This requirement does not eliminate the SBA goals for conducting business with small, small disadvantaged, and woman owned businesses for the Forest, but rather adds another important element.

HUBZONES are specific areas of the state that are designated by SBA to be qualified for this program, allowing competition to be restricted to qualifying contractors. In the simplest definition, to qualify, a firm must be a small business, owned and controlled by US citizens, whose principal office must be in the HUBZONE, and at least 35% of the employees of which must reside in the HUBZONE.

The Small Business Administration who determines the eligibility of contractors in these zones administers the HUBZONE program. In order to bid on contracts, which are set-aside for the HUBZONE, contractors must be HUBZONE certified by SBA. This can be accomplished by contacting SBA directly at their web site below. The site will also provide you with how to apply and maps of the areas that are affected in the Northern New Mexico Zone. Please use www.sba.gov/ as your source of information for your questions.

Contracting Methods

The Forest Service uses three basic methods to acquire needed goods and services: simplified acquisition procedures, sealed bidding, and contracting by negotiation.

Request For Quotations (RFQ)

Request For Quotations is a process used in procurements estimated at under $100,000.00. This process is not binding on either party until a formal offer and acceptance have taken place.

There are no "bid results" available under the negotiated process and contractors may withdraw their quote, or change their pricing at anytime prior to award, and the Government may decide not to award. Awards may not necessarily be made to the low bidder. Award may be made as best value to the Government, price and other factors considered.

Request for Proposals (RFP )

Request for Proposals is a negotiated process used in procurements estimated over $100,000.00. This process is binding, however some times discussions are conducted and the contractor may increase or decrease costs in a Best and Final Offer. If the Government finds the work is no longer required the project may be cancelled and no award made. This type of procurement is also based on factors other than cost, such as, capacity, past performance, experience and sometimes equipment or other criteria will be listed. Best Value Practices are also used; meaning price may be a secondary consideration.

Sealed Bid (IFB), Invitation For Bid

A method of contracting for goods and services estimated at over $100,000 that uses competitive bids and has public opening of bids.

· Synopsis of the requirements is published in the Federal Business Opportunities.

· Bidders submit sealed bids.

· After bids are publicly opened, an award will be made to that responsible bidder whose bid, conforming to the invitation for bids, will be most advantageous to the government, price and other factors considered.

· Note: A contracting officer may, in special circumstances, require bonds in contracts over $25,000 if it is in the best interest of the government.

Commercial Item Acquisitions

The Federal Acquisition Streamlining Act of 1994 established a preference for the acquisition of commercial items, and included requirements unique to such acquisitions, intended to more closely resemble the commercial marketplace. To arrive at contract award, the steps to be followed in commercial item acquisitions are generally combined with those for simplified acquisition, sealed bidding or contracting by negotiation. Special requirements related to commercial item acquisitions include expanded market research, streamlined evaluation procedures, and the ability to more closely follow the customary commercial practice for the item/service being acquired.

Other Laws and Regulations

While space does not permit a complete listing or discussion of other laws and regulations, some of the important ones apply to the Federal or State labor requirements for:

· Safety, health and sanitation

· Maximum hours and overtime

· Equal Opportunity

· Child and convict labor

· Age discrimination

· Disabled and Vietnam veterans employment

· Employment of the disabled

· Migrant and Seasonal Agricultural Workers Protection Act (MSPA)

· Buy American Act

Clauses pertaining to these items and others are included in solicitations, if applicable and are usually self-explanatory. Bidders are required and expected to become familiar with the requirements of the clauses before submitting a bid.

USDA Forest Service - Cibola National Forest
Last Modified: Tuesday, 21 June 2005 at 18:22:59 EDT