Management System: Management and Operating (M&O) Contracting

Subject Area: Management and Operating (M&O) Contract Management and Administration

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Issue Date:  09/17/2012
SCMS Revision:  2.11

1.0 Introduction

The management of an Office of Science (SC) Management and Operating (M&O) contract is performed through the combined efforts of SC staff from Headquarters (HQ), SC Site Offices, and the SC Integrated Support Center (ISC) and involves a variety of administrative, legal, assessment, and reporting activities. This phase of contract management starts after the contract is awarded (see SC Management and Operating (M&O) Contract Competition Subject Area, SC Management and Operating (M&O) Contract Extension Subject Area, and SC Management and Operating (M&O) Contract Planning Subject Area) and continues until a contract is closed out (see SC Closeout of a Management and Operating (M&O) Contract Subject Area).

The SC Site Office Manager serves as the U.S. Department of Energy (DOE) line manager accountable for the management of the M&O contract and oversight of the day‑to‑day activities at the Laboratory under their cognizance. The SC Site Office Manager also serves as DOE's principal point of contact to the M&O contractor management. The SC Contracting Officer (CO) within the SC Site Office has the legal contracting responsibility for contract administration. SC Staff in the SC Site Office, the SC ISC and HQ carry out a variety of oversight activities that are prescribed by DOE regulations, DOE Directives (e.g., DOE Orders, DOE policy documents), the Prime Contract between DOE and the M&O contractor. This staff consists of, but is not limited to COs, contract specialists, safety and operations specialists, legal, project management, business, environmental, property, finance individuals.

This subject area describes how SC Federal staff administers a contract and facilitates the performance of the M&O contractor by the following:

• Establishing formal requirements and expectations through the contract,
• Monitoring and evaluating contractor performance against those expectations,
• Providing feedback to the contractor through a variety of formal and informal mechanisms during the year, and
• Holding the contractor accountable for performance.

Procedures in this subject area amplify established SC processes and management expectations for the performance of particular Federal functions and reflect process that require the participation of several organizations within SC or DOE.

The major components of contract management and administration are described below:

1.1  Managing Contract Requirements and Expectations

Managing contract requirements and expectations includes: (1) the creation of a Contract Management Plan (CMP), (2) the establishment of an annual Performance Evaluation and Measurement Plan (PEMP) under the SC Laboratory Performance Appraisal Process, (3) the management of changes to the contract requirements and/or expectations through contract modifications, and (4) the processing of work authorizations, such as those required for DOE work and Work for Others (WFO), approval of subcontracts, and the approval of the Laboratory Directed Research and Development (LDRD) funding levels and individual projects. This subject area includes SC procedures on these processes. The CMP is a living document for the management of existing contract requirements and expectations and does not establish new, or change the existing contract requirements. The other documents and processes described above may set new expectations and requirements through the contract that DOE must assure are met.

At the same time, SC staff has many key Federal responsibilities and deliverables that are critical to the success of the contractor. This includes activities such as (1) signing permits as the facility owner, (2) reviewing and approving key operations documents, (3) approving work authorizations in a timely manner, and (4) communicating with stakeholders to gain support for a program or to resolve issues with a regulatory agency. These services are covered by procedures in this subject area and many other subject areas in the Office of SCience Management System (SCMS).

1.2  Contract Performance Monitoring, Evaluation, and Feedback

Contract performance monitoring, evaluation, and feedback are the essence of day‑to‑day operations at a site office and key drivers for the on‑site presence of Federal staff. DOE Headquarters (HQ) Program Office Staff also contribute to performance monitoring and feedback for the science and technology reports and deliverables. SC staff evaluates contractor performance in meeting contractual requirements and expectations.

Performance monitoring occurs through the evaluation and acceptance of contract deliverables, conducting performance reviews, preparing performance reports, daily monitoring of ongoing activities, and the use of contractor self‑reporting. Examples of these activities include: (1) facility representative walk‑throughs, (2) SC Site Office Staff operational awareness activities, (3) program and project reviews that approve key contract milestones, (4) performing personal and real property inspections, and (5) accepting completed projects for startup. These types of activities are described in management systems throughout SCMS.

Performance feedback is provided to the contractor through formal periodic appraisals and other feedback mechanisms, including informal mechanisms, so that deficiencies are understood and corrected. This process involves formal communication of performance results to the contractor. These include results obtained from monitoring activities along with the year‑end formal contract “Report Card” described in Procedure 5, Developing and Executing the SC Laboratory Performance Appraisal Process, on the SC Guidance: SC Laboratory Performance Appraisal Process. Feedback processes must also include effective corrective action and issues management processes and the use of contract accountability tools, such as (1) stop work, (2) adjustments to the scope of work, (3) revocation of management system approvals, (4) limitations on delegated approval thresholds, (5) adjustments to assessment frequencies, (6) Price Anderson Amendment Act (PAAA) enforcement, and (7) conditional payment of fee or contract award term. These actions are reserved for significant performance shortcomings. The basis for taking these actions should be firmly supported by feedback of performance results formally communicated to the contractor. In all cases, it is imperative that Federal staff responsible for the oversight of an M&O contract refer to the specific applicable contract clauses to understand any contract specific processes, authorities, and limitations.

The other SC Management Systems and the SC Line Management Oversight Program Description support the monitoring and evaluation of the M&O contractor performance against the contractor requirements and expectations and contain processes that can provide input to the SC Management and Operating (M&O) Contracting Management System. It is important to consider inputs and evaluations of performance from all of the other SCMS Management Systems when completing the periodic and the end‑of‑year contractor evaluations. The evaluation of the contractor’s overall performance throughout the year then provides input back to the process to set expectations.

2.0 Contents

Procedures	Procedure Content
1. Preparing and Approving a Contract Management Plan	Develop, approve and implement a Contract Management Plan. Use CMP Template (see Section 3.0, "Exhibits/ Forms") and tailor to site‑specific needs. Forward the CMP to the Head of the Contracting Activity (HCA) for review. HCA forwards to the DOE HQ Contract Administration Division (MA‑622) for approval. Implement approved CMP.
2. Evaluating Requirements for Contract Applicability	Flow‑down of DOE Directives, Federal laws, and regulations to M&O contracts. Contracting Officer (CO) or Contracting Officer's Representative (COR) determine applicability. Provide to contractor to assess impact of compliance. Evaluate contractor impacts. Incorporate into the contract.
3. Maintaining a Work Authorization System	Preparation of work authorizations for  DOE‑funded work to be performed under the M&O contract. SC Site Office and contractor review and work authorization. Work authorization performance monitoring.
4. Reviewing and Approving a Subcontract	Respond to DOE HQ Office of Contract Management (MA‑62) Business Clearance Call Letter. Review and approval of individual subcontract packages at site office within approval thresholds. Review and approval by HCA of subcontracts above $25M.
5. Developing and Executing the SC Laboratory Performance Appraisal Process	Develop, approve, and issue annual PEMP. Monitor contractor performance. Prepare midyear and end‑of‑year laboratory performance evaluation reports. SC‑1 review and approval of laboratory performance and “Report Cards.” Provide feedback to the contractor. See SC Guidance: SC Laboratory Performance Appraisal Process.
6. Technology Partnering -- Preparing, Reviewing and Approving Joint Work Statements (JWSs) and Cooperative Research and Development Agreements (CRADAs)	Technology Partnering program oversight. Review and approve JWSs and/or CRADAs. See Example of a Cooperative Research and Development Agreement (CRADA) Approval Checklist and Example of a Joint Work Statement (JWS) Approval Checklist.
7. Reviewing and Approving Work for Others (WFO) and Work for the U.S. Department of Homeland Security (DHS)	Approval and monitoring of WFO funding level. Review and approve laboratory WFO Program. Review and concur on individual laboratory and work for the DHS.
8. Reviewing and Approving Laboratory Directed Research and Development (LDRD) Programs and Projects	For LDRD guidance and information on LDRD Roles and Responsibilities, see Memorandum from Raymond L. Orbach, Under Secretary for Science, to Distribution, titled "Laboratory Directed Research and Development," dated 06/19/2006. Review and approve laboratory LDRD Program Plan. Review and concur on individual LDRD projects. Monitor LDRD program performance.

3.0 Exhibits/Forms

• Business Clearance Call Letter (Example)

• Contract Management Plan Template

• DOE F 4220.10, Congressional, Public, and Intergovernmental Affairs (CP) Notification

• Example of a Joint Work Statement (DOE M 483.1-1, Appendix A)

• Example of a Cooperative Research and Development Agreement (CRADA) Approval Checklist

• Example of a Cooperative Research and Development Agreement (DOE M 483.1-1, Appendix B)

• Example of a Joint Work Statement (JWS) Approval Checklist

• Example of On-Site Review Outline of the Site Office Management/Oversight of the Laboratory Work for Others (WFO) Program

• Memorandum from Raymond L. Orbach, Under Secretary for Science, to Distribution, titled "Laboratory Directed Research and Development," dated 06/19/2006

• Purchasing System Requirements (Example)

• Roles and Responsibilities for Procedure 1, "Preparing and Approving a Contract Management Plan"

• Sample Work Authorization Form (DOE O 412.1A, Attachment 2)

• SC-CH O 541.1D, "Contracting Authority and Responsibilities," dated 12/29/2008 (Example)

• Transmittal Letter for Directives/Requirements Impacts (Example)

4.0 Related Information

• DEAR 970.1100-1, Performance-Based Contracting

• DEAR 970.1170-2, Contract Provision

• DEAR 970.1707, Work for Others

• DEAR 970.1907, Subcontracting with Small Business, Small Disadvantaged Business, and Woman‑Owned Small Business Concerns

• DEAR 970.44, Management and Operating Contractor Purchasing

• DEAR 970.5204‑2, Laws, Regulations, and DOE Directives

• DEAR 970.5227‑3, Technology Transfer Mission (or local clause)

• Delegation Memorandum from Edward R. Simpson, Director, Office of Procurement and Assistance Management, for George J. Malosh, Deputy Director for Field Operations, Office of Science, titled "Delegation of Authority/Designation as Head of Contracting Activity (HCA) for the Office of Science," dated 09/19/2008

• DOE Accounting Handbook

• DOE Accounting Handbook, Chapter 13, "Reimbursable Work, Revenues, and Other Collections" (for CRADA Funds‑In)

• DOE Acquisition Guide, Chapter 7.1, "Acquisition Planning"

• DOE Acquisition Letters

• DOE G 120.1‑5, Guidelines for Performance Measurement

• DOE O 130.1, Budget Formulation

• DOE M 135.1‑1A, Department of Energy Budget Execution – Funds Distribution And Control Manual

• DOE O 241.1A, Administrative Change 1, Scientific and Technical Information Management

• DOE O 412.1A, Work Authorization System

• DOE P 450.4, Safety Management System Policy

• DOE M 450.3-1, The Department of Energy Closure Process for Necessary and Sufficient Sets of Standards

• DOE O 452.1D, Nuclear Explosive and Weapon Surety Program

• DOE O 452.2D, Nuclear Explosive Safety

• DOE O 452.4B, Security and Control of Nuclear Explosives and Nuclear Weapons

• DOE M 481.1‑1A, Change 1, Reimbursable Work for Non‑Federal Sponsors Process Manual

• DOE M 483.1‑1, DOE Cooperative Research and Development Agreements Manual

• DOE O 484.1, Admin. Change 1, Reimbursable Work for the Department of Homeland Security

• DOE O 522.1, Pricing of Departmental Material and Services (for CRADA Funds‑In)

• DOE O 534.1B, Accounting

• DOE O 541.1B, Appointment of Contracting Officers and Contracting Officer Representatives

• DOE O 1220.1A, Change 1, Congressional and Intergovernmental Affairs

• FAR 6, Competition Requirements

• FAR 9, Contractor Qualifications

• FAR 15, Contracting by Negotiation

• FAR 17.5, Interagency Acquisitions under the Economy Act

• FAR 17.6, Management and Operating Contracts

• FAR 28, Bonds and Insurance

• FAR 30, Cost Accounting Standards Administration

• FAR 31, Contract Cost Principles and Procedures

• FAR 35.017, Federally Funded Research and Development Centers (FFRDCs)

• FAR 37.6, Performance-Based Acquisition

• FAR 43, Contract Modifications

• FAR 44.2, Consent to Subcontracts

• FAR 52.252‑6, Authorized Deviations in Clauses

• P.L. 83‑303 (42 U.S.C. 2011 et seq.), Sections 31, 32, and 33, Atomic Energy Act of 1954, As Amended

• P.L. 83‑703 (42 U.S.C. 2103, 2051, and 2053), The Atomic Energy Act of 1954, As Amended

• P.L. 93‑438, Section 205, (42 U.S.C. 5845), Energy Reorganization Act of 1974

• P.L. 95‑39 (Section 303), An Act for Authorizations and Appropriations for the Energy Research and Development Administration for FY1977

• P.L. 101‑510, Section 3132 (c), National Defense Authorization Act for Fiscal Year 1991

• P.L. 106‑65, Title XXXII, National Nuclear Security Administration Act

• Secretarial Policy Statement on Technology Transfer at Department of Energy Facilities, dated 01/31/2008

• SC Guidance: SC Laboratory Performance Appraisal Process

• SC Office of Laboratory Policy and Evaluation (SC-32) Web site (NOTE: This web site has the Report Cards.)

• SC Management and Operating (M&O) Contract Competition Subject Area

• SC Management and Operating (M&O) Contract Extension Subject Area

• SC Management and Operating (M&O) Contract Planning Subject Area

• SC Closeout of a Management and Operating (M&O) Contract Subject Area

• 31 U.S.C. 1535, The Economy Act of 1932, As Amended

5.0 Requirements

Document	Title	Requirement Decision Record
DOE O 481.1C	Work For Others (Non-Department Of Energy Funded Work)	Completed
DOE O 483.1	DOE Cooperative Research And Development Agreements	Completed
DOE O 484.1, Admin. Change 1	Reimbursable Work For The Department Of Homeland Security	Completed
DOE Acquisition Guide	Department Of Energy Acquisition Guide	Completed
15 U.S.C., Section 3710a	Cooperative Research and Development Agreements	Completed

6.0 Definitions

Definitions.

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This is not the online OFFICIAL SCMS COPY of this file. Before using this printed copy, verify that it is the most current version by checking the Last Major Revision and Last Minor Revision dates (at the bottom of each document) on the SCMS Web site.

This is the online OFFICIAL SCMS COPY of this file. Before using a printed copy, verify that it is the most current version by checking the Last Major Revision and Last Minor Revision dates (at the bottom of each document) on the SCMS Web site.

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