CON 216 Legal Considerations in Contracting

What is the best way for the inventor to protect his/her investment if the invention of a new composite material for turbofan blades is susceptible to reverse engineering? - ANSWER Trade Secret Copyright Trademark *Patent Why may the Executive Branch of the federal government enter into a contract for supplies to support armed forces? - ANSWER -The Executive Branch has an inherent Constitutional power to enter into a contract -All of the choices are correct -Congress has enacted statues to authorize and fund military procurement Which of the following statements is/are true? - ANSWER *-Appropriation makes money available for various purposes legislated by Congress. *-Appropriation of money gives authority to spend it *-Authorization does not make money available, but it may tell us the purpose Congress intends for the money, and it often contains restrictions on how money may be spent *-Authorization acts often contain substantive legislation Which of the following is false about Government's rights to intellectual property? - ANSWER -If a Government contract authorizes the contractor to use an invention covered by a U.S. patent, and the patent owner sues the Government for patent infringement, the Government may seek reimbursement from the contractor. -As a Government employee, you can file for a patent for an invention you created while on the job; however, the Government is entitled to claim title to the invention *-The Government has the right to use any U.S. patent for a public purpose without paying compensation to the patent holder -Congressional power to enact the patent and copyright laws is premised upon the U.S. Constitution Today is 27 SEP 2013, and Congress passed the FY2014 DoD Authorization Act. The FY2014 Appropriations Act has not been passed yet. Your installation's base support services contact (for security, recreation activities, vehicle maintenance, janitorial services, and the like) currently held by Doall, Inc. is of utmost concern to BG Combat. She wonders why we have not exercised Doall's two options for services beginning 1 October 2013 through 30 September 2014. BG Combat remarks that Mr. Einstein, Director of the U.S. Special Operations Test and Evaluation Command (USSOTEC) has $250,000 of unobligated FY2013 Research, Development, Test, and Evaluation (RDT&E) funds available because of delays in one of its programs. Doall provides support services (for operation and maintenance of USSOTEC facilities) directly to USSOTEC under a separate line item in the contract. There were two options in the contract: one for installation services for the base and one for the USSOTEC services. BG Combat wants the FY2014 options exercised and the $250,000 obligated. Which of the following statements is correct based on this scenario? - ANSWER -FY2014 RDT&E funds may be used to fund base installation services -The FY2014 Authorization Act actually appropriates funding *-FY2013 RDT&E funds may be used to exercise the FY2014 option for the USSOTEC services -FY2014 funding is available for obligation before October 1, 2013 Following award of a construction contract to build a new swimming pool at Delta Air Force Base, the contracting officer conducted a meeting with the contractor and the base athletic director. Pointing to the athletic director, the contracting officer stated, "That's your contact and the person you have to satisfy." Several months later the contractor submits a claim for the cost of five tons of marble, used to enhance the "motivational aspects" of the pool, as requested by the athletic director. Which of the following statements is accurate? - ANSWER -The Government is not required to pay for the additional marble, because the request was a sovereign act of the federal government -The Government is not required to pay for the additional marble, because it can deny responsibility for the athletic director's action under the concept of estoppel -The Government must pay for the additional marble, because the athletic director was acting within the scope of her apparent authority *-The Government must pay for the additional marble if it is determined that the athletic director had been delegated actual authority (express or implied) to bind the Government for the additional work The Armored Personnel Carrier System Program Office wishes to award six contracts, using research and development (R&D) money, for the following purposes: perform research on the anti-lock braking system, build a new prototype personnel carrier; transport the personnel carrier to Ft Irwin for testing; conducting the testing at Ft Irwin; and build 30 of these personnel carriers. R&D funding may be used to build 30 of these personnel carriers for deployment to active units. - ANSWER -True *-False Acme performs a government research and development contract with the stated purpose of creating a new "thin" parachute that can be comfortably worn by aircrew while working and moving about inside the aircraft. All Research & Development (R&D) expenses incurred by Acme in developing this new system are reimbursed by the Government. The contract contains the "Patent Rights" clause found at 52.227-11 Patent Rights-Ownership by the Contractor. The contractor obtains many patents for the new inventions developed under the contract at Government expense. Under the terms of the clause, what duties and rights does the contractor have? - ANSWER -The contractor may elect to disclose only those inventions that it determines are of importance to the Government, but the n must convey the entire title to the patent to the government. -The contractor must disclose the patents to the Government and allow the public to freely use them, as they were developed at public expense. *-The contractor must disclose all of these inventions to the Government, but may retain title (ownership) to the inventions -The contractor must disclose all patents and convey all rights to the Government, since the new technology was developed purely at public expense. John needs a ride to the airport and asks his buddy Paul to give him a ride. Paul says, "Okay, but you need to give me a ride to the airport next month when I go to my sister's wedding." As John gets out of the car at the airport, he declares, "I owe you one, mate." When Paul asks John for a ride to the airport, John turns him down, explaining that he's got a date. Is John's promise legally enforceable? - ANSWER *-Yes, because each party promised to render consideration in the form of transportation to the airport -No, because the value of the consideration is so small that it is legally insignificant -No, because Paul rendered his consideration prior to John -No, because no monetary consideration was paid by either party Which of the following parties would not be considered an "Interested Party" as defined by the FAR? - ANSWER -A losing offeror in a best value procurement who alleges that errors in the evaluation process adversely affected the company's chances to win award. *-A company who did not submit a bid and would not receive the award even if its protest was sustained. -An Agency Tender Official in an A-76 public-private competition. -A company who alleges that a change order adding work to an existing contract is "out of scope" and thereby constitutes an unjustified sole source procurement in violation of the Competition in Contracting Act. Acme Corporation submits an initial proposal to perform maintenance on target drone aircraft at NAS DESERT VISTA. During discussions, the contracting officer (KO) notes that Acme's price calculations are based on the premise that Acme will hire mechanics at the labor rates contained in the Department of Labor (DOL) wage determination. The KO notes that Acme already has a contract to provide aircraft maintenance at NAS DESERT VISTA and that the unionized mechanics working under that contract already receive wages higher than the DOL prevailing rate. The KO questions whether Acme will be able to pay new employees less than the wages already being paid to current employees. Acme's project manager concedes it could be a problem and reluctantly agrees to recalculate Acme's price, but complains that we might lose the contract because of this. Acme's final proposal revision increases the proposed price by $1,000,000 and it loses to Beta, who offers a price that is $500,000 lower. Acme protest to GAO. Which is the most likely outcome? - ANSWER -The protest will be heard by GAO because the Contracting Officer (KO) assured Acme that "it could always file a protest"; by this statement, the KO "waived" GAO's timeliness rules. -The protest will be dismissed without consideration by GAO, because Acme must first file its protest with the KO before filing with GAO. -The protest will not be heard by GAO, because this issue concerns DOL labor rates. Therefore, the matter must be submitted to the Department of Labor. *-The protest will be dismissed as untimely, because Acme was aware of this ground of protest before submitting the final proposal revision and therefore had to file the protest prior to that time. Which protest PARTICIPANT is likely to schedule a hearing to resolve issues raised in a protest? - ANSWER -Contracting Agency *-Government Accountability Office -U.S. Court of Appeals for the Federal Circuit -The interested party FAR 52.246 provides that Government acceptance in a non-commercial contract for goods and services is final and conclusive. Which of the following statements is incorrect? - ANSWER -The perfect tender rule only applies to commercial item procurements conducted under FAR Part 12. *-The burden of proof on latent defects rests with the contractor to prove the defective material and workmanship is the probable cause of the failure of the product. -Acceptance may be revoked if fraud or gross mistake amounting to fraud induces the government to accept the delivered item. -If after a reasonable inspection was performed and the defect was not discovered, the defect is latent. Which method of calculating an equitable adjustment uses analysis of the contract change by individuals who are qualified and knowledgeable about the facts? - ANSWER -Actual cost *-Estimated costs -Jury verdict -Total cost method Which statement is true about assignment of claims? - ANSWER *-It denotes an agreement between the contractor and financial institution. -It can only be used once during the life of a contract. -It is only applicable to contracts over $100,000. -It does not require the Government approval or acknowledgement. AFC was awarded a firm fixed price contract for the construction of a Government building. A dispute arose during construction regarding the application of a protective covering for membrane waterproofing on the basement walls. The contract specification states: "Waterproofing shall be applied on the bottom floor." At the time AFC submitted its bid, AFC interpreted the specification to require application of waterproofing only to the basement floor, not the basement walls. During performance, the Contracting Officer (KO) disagreed with AFC's interpretation and advised that the term "bottom floor" meant the entire lowest floor of the building, i.e. the basement, and that both the walls and the floor of the basement must be waterproofed. Consequently, the KO directs AFC to waterproof the basement walls. AFC installs the protective covering and then files a claim for the additional cost incurred. Who prevails? - ANSWER -AFC, if its interpretation is reasonable. -The Government, because all changes are required to be in writing. -AFC, because this direction constitutes a "cardinal change." Which protest PARTICIPANT examines the protest to ensure that it is timely, identifies the basis for the protest, and renders a written decision with factual detail explaining the decision? - ANSWER *-Contracting Agency -The interested party -U.S. Court of Federal Claims -Contract Board of Appeals The contractor currently working on your service contract has just been awarded another service contract in the amount of $10,000 for janitorial work in DAU building #7. He has never asked for nor received an assignment of claims before. He decided that he would like the recently awarded service contract payments to go directly to his bank. An assignment of claims is permissible in this situation. - ANSWER *-True You have elected to use conciliation to resolve a dispute with a contractor. Which of the following is true about this ADR technique? - ANSWER -This ADR technique involves use of a third party neutral who listens to the issues from both parties and works with them to discover their mutual interests (interest-based negotiation) and then attempts to define the best and worst alternatives to a negotiated agreement. -This ADR technique is a process in which a third party improves the flow of information among disputing parties to enable the parties to effectively move through negotiation towards agreement. -This ADR technique involves an agreement in principle to share the risks involved in completing the project and establish and promote a nurturing "partnership" environment. *-This ADR technique seeks to restore damaged relationships between parties by bringing them together, clarifying perceptions, and pointing out misconceptions. The Navy competitively awards a firm fixed price contract for manufacture and delivery of 100 specially designed radios, for use onboard Navy vessels. These radios are not commercial items; they are built to a design specification provided by the government. The contract contains the Changes clause for fixed price supply and service contracts, FAR 52.243-1. Two months into contract performance, the requiring activity informs the contracting officer (KO) that it will need an additional 25 radios. The KO unilaterally issues a change pursuant to the changes clause to increase the contract quantity from 100 to 125. Is this a proper action? - ANSWER -No, because all changes must be bilateral. -Yes, because the changes clause is often used for small increases in quantity. *-No, because this is a cardinal change. -Yes, because this change was reasonably foreseeable at the time of contract formation. All of the following are valid protest forums EXCEPT the: - ANSWER -Government Accountability Office. *-Civilian Board of Contract Appeals. -U.S. Court of Federal Claims. -Agency that issued the procurement. What is a complaint? - ANSWER *-A legal pleading that sets forth the factual and legal basis for a contractor's claim -A written request for documentation in a lawsuit -A written demand for compensation served on the contracting officer -A written notice filed with the court to complain of unethical behavior by opposing counsel A contractor has been performing poorly on one of your commercial contracts, and a termination for cause appears likely. Select the choice that represents the correct order of steps for a termination of cause. - ANSWER -Prepare the termination notice, obtain written concurrence from the customer, negotiate a termination settlement with the contractor. *-Discuss the proposed termination with your customer, issue written termination notice, formally inform interested parties. -Negotiate a termination settlement with the contractor, consider alternatives to a termination, issue the termination notice. Prepare the termination notice, obtain written concurrence from the customer, negotiate a termination settlement with the contractor. Issue the termination notice, consider alternatives to termination, determine the amount (if any) due to the contractor for work delivered. -Issue the termination notice, consider alternatives to termination, determine the amount (if any) due to the contractor for work delivered. Which of the following is the best reason to terminate a contractor for convenience? - ANSWER -The government has identified another source for the goods and services that is preferred by the end user. -The contractor and the government have developed an adversarial relationship. -The contractor has failed to deliver in a timely manner. *-The government's requirements have changed and the contract is no longer required. A supply or service contract may not be terminated for default if the contractor - ANSWER -fails to perform in a timely manner. -has failed to make progress. -fails to comply with the terms and conditions. *-refuses to perform additional testing not required by the contract. You overheard a conversation between Sam, a Government requirements person and Kelli, a contractor. You overheard Sam ask Kelli to leave some very expensive items in his unlocked car. In return, Sam would initiate a sole source requirement to Kelli. What is this a violation of? - ANSWER *-Bribery of Public Official -False Claims -Major Fraud -Truth in Negotiations Act In the event of contract fraud, the contracting officer is responsible for doing what? - ANSWER -Prosecute criminal actions against the corporation and its employees. *-Initiate appropriate investigative action and develop a fraud remedies plan. -Suspend and/or debar the corporation, as appropriate. You have a non-commercial contract that is experiencing late deliveries. You are considering a possible termination. Which choice best represents the correct sequence of events to terminated a contract for default? - ANSWER -Consider alternatives to the termination; negotiate the termination settlement with the customer; issue the termination notice. *-Discuss the proposed termination with your customer; consider alternatives to termination; issue the written termination notice for default. -Arrange for the defaulted contract to be re-negotiated with the next most competitive offeror; obtain concurrence from the small business specialist; negotiate the final termination settlement within 45 days. -Prepare the termination for convenience notice; issue a "delay of contract" notification; obtain written concurrence from the customer. Your customer has informed you that some of the contract's requirements have changed. As business advisor to the acquisition team, you are considering recommending a termination action. Which choice represents the correct first step? - ANSWER -Document the contract file as to the rationale for a termination for convenience. -Officially inform the contractor in writing to fulfill all remaining terms of the contract. *-Discuss the matter with the customer and legal counsel to consider alternatives to termination. -Issue a cure notice to the contractor, prior to issuing a show cause notice. Which of the following is not a common fraudulent practice which may occur during the procurement process? - ANSWER *-Late delivery of required supplies -Altering or substituting materials -Making false statements -Payment or acceptance of bribes or gratuities Which is not a common reason for contractor debt? - ANSWER -Retroactive price reductions resulting from contract price re-determination or for the determination of prices under incentive type contracts -Overpayments for errors in quantity, billing or deficiencies in quality -Overpayments disclosed by quarterly statements required under price re-determination or incentive contracts *-Government Contractor expenses to correct defects caused by the Government You are reviewing the payment records for your contract with Swift Manufacturing Company. You notice two payments for the same amount, $178,575, which is odd since deliveries under the contract have been for differing quantities. After reviewing the contract, you have cause to believe that Swift owes money to the Government. You decide to initiate a debt recovery. What steps should you take? - ANSWER *-Issue a demand letter for the overpayment. -Notify the payment office to suspend all payments to Swift immediately. *-Provide the demand letter to the Disbursing Officer. -Give Swift's check for the overpayment to your customer. You have determined that due to late completion of a road construction contract Risen Construction, an SBA 8(a), owes the Government $225,000 in liquidated damages (LDs). What actions must you take to recover this money? - ANSWER -Debar the contractor so they can't receive future contracts. *-Notify Risen that they owe $225,000 in liquidated damages and they have 30 days to request a review. -Terminate the contract for default. -Notify the SBA that they are responsible for the LDs since the contract was with the SBA. Beta Corporation was awarded a $2M contract to manufacture 200 electronic components for the FA-45 flight control system. The contract required new materials to be used. Beta had 20 used components on hand that had been stripped out of test aircraft. Rather than let these "go to waste", Beta elected to refurbish these components and submit them with the other 180 newly manufactured units. In its invoice, Beta certifies that all 200 units are "newly manufactured from new materials." Subsequently, one of the refurbished items fails which causes a Government aircraft to crash. During the investigation, the Government learns the truth. Which of the following statutory remedies is not available to the Government? - ANSWER -A $10k criminal fine and imprisonment of up to 5 years for the responsible corporate employees under the Major Fraud Act -Permanent debarment under the criminal False Claims Act, ensuring that Beta may never obtain another government contract -Five years' incarceration under the Fraud and False Statements Act Which of the following is not a ground to issue a termination for convenience? - ANSWER -The funding obligated against the contract is needed for other, more urgent requirements *-A contract awarded using competitive procedures was not won by the company desired by the customer. -The supplies for a previously properly issued termination for default, are no longer needed. -The contractor has not performed in a timely manner because of government interference and now the requirement is no longer needed.