NOAA Acquisition Manual


Main Table of Contents

Subchapter C- Contracting Methods and Contract Types

Part 1330-16 Types of Contracts

Subpart 1330-16.3 Cost-reimbursement Contracts

1330-16.301-3 Limitations

Subpart 1330-16.4 Incentive Contracts

1330-16.401- General

1330-16.405 Cost-reimbursement Incentive Contracts

1330-16.405-270 Cost plus Award Fee and Award Term Processes Supporting Fees and Extensions

Subpart 1330-16.5 Indefinite - Delivery Contracts

1330-16.505 Ordering

Subpart 1330-16.6 Time-and-Materials, Labor-Hour, and Letter Contracts

1330-16.601 Time-and-Materials Contracts

1330-16.602 Labor-Hour Contracts

1330-16.603 Letter Contracts

1330-16.603-370 Limitations


Part 1330-16 Types of Contracts

Subpart 1330-16.3 Cost-reimbursement Contracts

1330-16.301-3 Limitations

(a)(2) As set forth in FAR 16.301-3 and CAM 1307.1, Acquisition Planning, the acquisition plan (including the milestone acquisition plan) shall be approved and signed at least one level above the contracting officer.  A written determination and findings (D&F) is not required when the documentation is included in the acquisition plan for a cost-reimbursement type contract (other than a time-and-materials (including labor-hour) or incentive contract as spelled out in 1330-16.401)

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Subpart 1330-16.4 Incentive Contracts

1330-16.401- General

(d) A D&F is required for all incentive contracts.  The D&F must be submitted through the AGO POD as an SBPO Review and approved by the SBPO with a copy provided to the Senior Procurement Executive (SPE) in accordance with CAM 1316.1 Section 7.3.

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1330-16.405 Cost-reimbursement Incentive Contracts

1330-16.405-270 Cost-Plus Award Fee and Award Term Processes Supporting Fees and Extensions

(a) The HCOs shall do the following:

  1. Require performance monitors to provide narrative comments that identify specific strengths, weaknesses, and deficiencies to support assigned ratings.

    1. Documentation for the basis of all award fee determinations will be required and documentation shall address specific strengths, weaknesses, and deficiencies supporting the ratings given, as measured against the criteria in the Award Fee Plan.
    2. A cost-benefit analysis in decisions on Cost-Plus Award Fee (CPAF) and Cost-Plus Award Term (CPAT) contracts must be performed; include documentation on how the benefits will offset the costs and justifications and approvals for all contract actions containing award fee and award term provisions.
    3. The amount of award fee earned (if any) shall be commensurate with the contractor’s overall cost, schedule, and technical performance as measured against the contract requirements as stated in the Award Fee Plan (see FAR 16.401(e)(2)).
    4. At a minimum, documentation will include a determination that overall cost, schedule, and technical performance in the aggregate are or are not at a satisfactory level.

  2. Develop award-fee and award-term incentive structures that encourage contractor excellence.

    1. Contracts containing award-fee and incentive structures will clearly include incentive structures and award-fee evaluation criteria linked to acquisition objectives,
    2. Objectives will be defined in terms of contract cost, schedule, and technical performance, and
    3. Evaluation criteria will be developed that motivates the contractor to enhance performance in the areas being rated, but not at the expense of at least minimum acceptable performance in all other areas.

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  1. Develop measurable and outcome-based criteria for assessing contractor performance for award-fee and award-term extensions in accordance with FAR 16.401(e)(3)(ii) and (iii) and CAM 1316.1 Section 7.2(a). Award-fee plans shall describe how contractor performance will be measured against the award-fee evaluation criteria.
  2. Establish a clear division of responsibility for the evaluation team (award-determining official, Performance Evaluation Board, and performance monitors) and prohibit the same official from performing multiple roles.
  3. Develop controls over the maintenance of contract files to ensure more immediate availability and completeness of documentation for all contract actions.

    1. Establishment, maintenance, and disposal of contract files will follow the guidance from FAR 4.8 and NAM 1330-4.8.
  1. The contracting officer shall ensure that the contract file contains documentation to support the decision to use an incentive contract in accordance with the documentation requirements listed in FAR 16.401(d), FAR 16.401(e)(ii), and CAM 1316.1 Section 7.3(a).

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Subpart 1330-16.5 Indefinite-Delivery Contracts

1330-16.505 Ordering

(b)(2)(ii)(A) Contracting officers shall use the AGO template entitled, “Justification for an Exception to Fair Opportunity for an Order over the Micro-purchase Threshold & up to the SAT,” when completing a justification for an exception to fair opportunity for a proposed action above the micro-purchase threshold and up to the SAT, unless a waiver to the required template has been granted by the NOAA SBPO. The request for waiver to the required AGO template shall provide supporting details using the AGO Transmittal Memorandum Template and be submitted through the AGO POD as an SBPO Review.

(b)(2)(ii)(B) Contracting officers shall use the AGO template entitled, “Justification for an Exception to Fair Opportunity for an order exceeding the SAT," when completing a justification to fair opportunity for a proposed action above the SAT under FAR 16.505(b)(2)(i), unless a waiver to the required template has been granted by the NOAA SBPO. The request for waiver to the required AGO template shall provide supporting details using the AGO Transmittal Memorandum Template and be submitted through the AGO POD as an SBPO Review.

(b)(2)(ii)(C) Approval.

The approval levels for a justification for an exception to fair opportunity are located in the NOAA AGO Review and Approval Matrix.

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Subpart 1330-16.6 Time-and-Materials, Labor-Hour, and Letter Contracts

1330-16.601 Time-and-Materials Contracts

(d)(1) Limitations.  Contracting officers shall utilize the AGO template entitled, D&F for Use of Time and Materials or Labor Hour Contract or Order, when completing a D&F that no contract type other than time-and materials or labor-hour is suitable, unless a request for waiver to the required template has been granted by the NOAA SBPO.  The request for waiver to the required AGO template shall provide supporting details using the AGO Transmittal Memorandum Template and be submitted through the AGO POD as an SBPO Review.

(ii)  The SBPO has delegated the authority to the HCOs to approve a D&F when no other contract type is suitable prior to execution of the base period if the base period plus any option periods exceed three years on time-and-materials type contracts. This authority is non-delegable and will remain in effect until rescinded.

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1330-16.602 Labor-Hour Contracts

Description.  A labor-hour contract is a variation of the time-and-materials contract, differing only in that materials are not supplied by the contractor.  Refer to FAR Subpart 16.601, CAM Chapter 1316.1, and NAM 1330-16.601 for application and limitations.

1330-16.603 Letter Contracts

1330-16.603-370 Limitations

(a)  Letter contracts exceeding $1M and modifications to those contracts require pre-award review and approval by the SBPO and, as such, shall be submitted through the POD as an SBPO review

(b) The contracting officer shall prepare a written determination that fully explains the need to begin performance before an agreement on, or determination of, contract terms, specifications, and price. The determination shall be submitted through the AGO POD as an SBPO Review and processed for SBPO approval.  At a minimum, the determination shall address the following:

  1. Description of the requirement,
  2. Date that the requirement was first known to exist,
  3. Statement of the determination required by FAR 16.603-3,
  4. Statement of the necessity and advantage to the Government of using a letter contract,
  5. Description of the adverse impact on agency requirements resulting from delays in beginning performance,
  6. Reasons why negotiation of a definitive contract or priced order did not and cannot occur in sufficient time to meet the acquisition need,
  7. Statement of all substantive matters that need to be resolved including contract terms, specifications, or prices that are not agreed to,
  8. Price ceiling or not-to-exceed price, and
  9. Proposed definitization schedule to convert the undefinitized contract action to a definitive contract (see FAR 16.603 and CAR 1316.603-2 for specific requirements related to definitization schedule).

(c) Contracting staff shall refer to NAM 1330-43.270 when negotiating Requests for Equitable Adjustment.


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