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Contract Cost and Documentation for the Navy


A contract for performance of works and services is an essential process. It happens between a contractor and a client whereby the contractor is engaged by the client to provide goods, works, and services which are special in nature and cannot be performed internally within the client’s premises without the engagement of a third-party service provider (Goldfayl, 2004). An example of such a contract is the case in this context whereby the Navy is the client and my business is the contractor providing speciality floor coating. After my business has completed the contractual services as agreed upon in the contract, various procedures follow such as payment for the services, The deal come to an end after the client has paid for the services or goods provided. This paper will discuss various aspects of a contract between the business and the Navy.

Contract Payment Type

The mode of payment adopted must be such that it is the most convenient for the business as a service provider and the navy as a client. The contract defines the mode of payment for the services provided and the duration the payment will take before it is disbursed to the contractor. There are various methods that can be adopted, but the most suitable one for this contract is the performance-based payment. It is a method of payment whereby the client pays the contractor based on the scope of the work done. This method is suitable because it allows both parties to have a fair deal in the contract undertaken. For instance, supposing that the business offers the floor coating services to an extent beyond what was budgeted for in the contract planning (Goldfayl, 2004). In such a scenario, the business can negotiate with the Navy for additional payments to cover the extra work done. For the Navy, the extent of payment is fairly based on the quantity and quality of services performed. Also, from the fact that the contract is concluded with a government agency, it is most likely that it presupposes a multiyear project, which makes the performance-based payment method viable. Despite its preference, this method is applicable when the client finds it practical and the contractor finds the terms favourable. It means that both parties to the contract must have a mutual agreement to use it as a mode of payment. One reason that makes this method preferred is that it promotes commitment between the contractor and the client (Cook, 2014).

Requesting The Use of the Navy’s Floor Equipment

In a contract, there are scenarios that necessitate the contractor to have mastered negotiation skills so as to obtain some benefits from the other party, the client. In this context, my business has noticed that the Navy has some floor equipment, which is idly lying in the Navy premises. Obliviously, the business is aware that this equipment has some potential benefits if it can be acquired by the latter. There are various approaches that the business can use to obtain such equipment from the navy. To start with is the use of trade-in terms. It implies that the business can offer some terms to the Navy to agree on the value of the equipment and in turn cover the cost by providing the speciality floor coating to the Navy. This will allow an exchange process between the business and the Navy, and both parties will benefit in one way or another (Goldfayl, 2004). Secondly, the business can use an approach that will convince the Navy to dispose of the unused floor equipment at a cost. It means that if the terms offered by the business are agreeable to the Navy, then the business will pay a specified amount of money to the Navy in exchange of the equipment. It will be a buy – sell transaction. Thirdly and finally is a lease agreement. The business can negotiate with the Navy so that it gets the rights to use the equipment. Under these terms, the business will pay a rent as a fee for the use of the equipment. By the end of a specified period of time, the business will return the equipment to the Navy. At this time, at the end of the lease period, the business can convince the Navy to sell the equipment instead of it lying idly with no notable returns.

Proposed Quality Control and Inspection Procedures

Quality assurance of works and services provided by the contractor is one of the features that must be proven to the client. Quality controls and inspection procedures are conducted after the contract has been awarded. Quality control and inspection procedures are conducted collaborative by the officials from the Navy and the business so as to ascertain that the contractor has met all the requirements specified in the contract. Quality control and inspection procedures are performed for all the dealings between the federal agency and the contractor. The processes review all the dealings from the start of the contract to the end when the contract is terminated or accepted.

There are various quality and inspection procedures that are paramount for any contract. To start with is the quality of the services. This inspection procedure entails assessment of whether the contractor has met the operational needs and requirements as specified in the contract. For instance, the Navy and the business may review the schedule objectives, management concerns to meet the budgeted costs, and whether the specialities have been met. Overall, the assessment will review how successfully the contractor has met the program quality. Secondly is the assessment of the schedule. This quality evaluation will look into how the contractor has adhered to the specified delivery schedule. It will assess the business’ effort to contribute to the effect of the schedule variance. Also, the quality control and inspection procedures can address the significance of scheduled events, their causes, and the corrective actions that the business has implemented.

Thirdly is the aspect of cost control. It looks into the effectiveness of the business in the aspects of forecasting, managing and controlling the contract costs. It also looks into the sense of cost responsibility that the contractor portrays such as the use of resources in the contract assigned. Fourthly and finally is the aspect of business’ relations. It looks into the aspects of timeliness, completeness, and quality of the problem identification as well as the corrective measures that were implemented to counter the adverse situations. Similarly, the evaluation reviews the business’ reasonable and cooperative behaviours, the level of the client’s satisfaction, and effectiveness of the contractor’s relations with the Navy. When these aspects are reviewed, the level of the quality of the services will be analysed and used to determine the level of the client’s satisfaction and the rating of the services provided by the business.

Whether The Navy Would or Would Not Have A Patent Infringement Objection for the Use of the Coating

Patent infringing is a common scenario in many contracts, particularly when the client has a reasonable belief that the contractor has violated the contract laws. Often, infringing occurs when a contractor stands out as a monopoly, and thus suspicion for violations of the patent laws (Berrios, 2006). My business, being a monopoly in the provision of the floor coating services may make the Navy doubt whether my business is infringing a patent or all the provisions of a patent are observed. However, this cannot be done arbitrarily because patent claims have to be well-reviewed to ascertain such accusations. In this contract, the Navy will not have parent infringement objections for various reasons. To start with, the business can prove that the patent is legal by availing terse statements on the scope of the invention of the services provided. In defending itself, the business will facilitate explanation of each claim to ensure that the services provided are on a legal patent (Johnson, Feng, Sitzabee, & Jernigan, 2012). As such, the elements of the patent must match the elements of the services provided. Being a legal patent holder, and ascertaining all the claims, the Navy would find no chance of raising patent infringe objections.

Mechanisms of Contract Closeout

Typically, the contract closeout comes towards the end of the contract. It encompasses all the activities that must be conducted after the actual objective of the contract has been achieved. There are various activities that are involved at the contract close out stage. Firstly, it is at this stage that the client ascertains that the work or services provided rate satisfactory. Secondly, the process allows the client and contractor to settle the payments and all the dues owed to each other. The conventional administrative closure of the contract involves the verification of costs and making of final amendments to the contract. After all the necessary activities have been performed, the project can be brought to closure (Johnson, Feng, Sitzabee, & Jernigan, 2012).

Because of the high adherence to the stipulated legal provisions governing the contracts with federal agencies as stipulated in the Federal Acquisitions Requirements, my business and the Navy would choose to conduct the contract closeout in a formal way and in a compliant manner. To start with, it would be necessary to determine who of us is responsible for the contract closeout. It is usually indicated on the contract award form, which provides for the terms of closing out the contract and specifies the responsible party (Cook, 2014). Secondly is the creation of a closeout file. This is a document that contains the details of the contract on the status sheet. It includes the details of the contract such as the contract number, date, and the name of the parties. All required filings would be done at this step. Thirdly is the determination of the physical completion and the closeout procedures. This stage ensures that the contract has physically met the expectations of the clients. For instance, the Navy would ascertain that the floor coating is done in a manner that is at or beyond its expectations.

Fourthly is the review of the payment histories and resolving any of the conflicts regarding funding. All the conflicts that might arise should be transferred to the office that was responsible for the payments. All obligated and de-obligated funds should be reconciled at this stage (Cook, 2014). Fifthly is the review of the contract provisions and clauses. This process is meant to ensure that the terms and conditions relative to the close out are in the contract. The application of the contract clauses and the provisions should be reviewed to ensure that both the Navy and the business in this context are satisfied.

Sixthly is the security classification. It is a stage that is meant to ensure that all classified materials and those that might pose harm to the occupiers of a facility are well disposed (Cook, 2014). The subsequent stages should follow only after the contractor has been cleared by the security office. In the seventh position, the Navy as the client will review the costs of the contract to ensure that there are no excess funds. If there are any excess funds in the contract, the Navy would send my business a letter for confirmation with a clear indication of the fiscal year in which the funds were allocated. The eighth step is request for an audit. This step is made to ensure that the contract records are well compiled and show a true information, which is accurately presented. Ninth is the negotiation and invoice payment. This stage relies on the previous stage. The audit establishes if either party owes another party. It is here that the business and the Navy would negotiate on the final costs. All negotiations should be recorded in the Price Negotiation Memorandum. All negotiated costs should be reflected in the final invoice designated FINAL. Finally, the process comes to an end when the finance department pays the contractor all the costs. It is followed by a management and final review for a compilation of Contract Action Review.

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