Contract performance is essential in ensuring the smooth execution of contracts. The parties to a contract are obligated to adhere to stipulated terms so as to ensure success and satisfaction of their counterparts. The set promises prior to a contract should be respected and followed by all parties. The government accountability office (GAO) has provided different reports on contract performance. This agency which is responsible for evaluation, audit and investigations in US congress plays a key role in monitoring business operations. Maintenance of law and order in contract execution is a key function of GAO. In this essay, the concept of contract performance will be reviewed with special focus on GAO reports on contract performance which expose different performance issues.
The GAO report, B-191095 of 1978 concerning the matter of Southern Industrial laundry, Alabama Laundries and Linen Supply gives valuable insights on contract performance. The issues of responsibility, satisfactory performance, transparency and accountability in the contract have been addressed. The report denotes that the protest against the awarded company is based on non responsible bidder. This is a key issue in contract performance which should be given priority. Successful bidders are obligated to demonstrate high levels of responsibility and adhere to set standards. Protests on contract award are also based on unsatisfactory performance. In response to this phenomenon, contractors are obligated to observe agreed upon terms rather than default some contract requirements. In order to ensure acceptable performance, the contract is due for termination if bidders fail to live by set standards. Another issue of concern addressed by GAO regarding contract performance is inspection of contract execution. This is vital for countering possible protests against the award of contracts to unfit bidders (Dembling, 1987).
The Report gives an overview of the invitation for bids by the US Army Missile material readiness Command for laundry and dry-cleaning. With this invitation, Southern Industrial Laundry, Alabama Laundry and Tennessee Laundry placed their bids. Tennessee Laundry won the contract being the lowest bidder. Alabama laundry was the protester. Based on the report, both bids were responsible to the IFB, whereby Tennessee Laundry won the contract due to its low bid. Following the failure of the bid and denial of protest, Alabama Laundry, which is the protester, filed a protest with GAO (Dembling, 1987).
In reference to contract performance, the issue of responsibility should be upheld. This element has been challenged by the protester, Alabama Laundry which alleges the use of an affirmative determination of responsibility by the contracting officer. The protester alleges that the contract winner, Tennessee laundry should have been declared non-responsible. In order to ensure harmony and satisfaction, appropriate criteria for determination of responsibility should be followed. For instance, satisfactory record of previous performance should be used in determining the suitability of a bidder. As argued by the protester, the winner, Tennessee Laundry does not meet the responsibility standard thus making it non responsible (Cohen & McKendrick, 2005).
The protester, Alabama Laundry has also offered damning allegations that Tennessee laundry’s performance is unsatisfactory. This is an issue of great concern in contract provision which need to be considered. This is in relation to failure to deliver some items. These are important aspects of contracts which every contractor should observe. Failure to inspect sites for performing a contract is also another issue brought forward by the protester. It is essential for contractors to thoroughly inspect the working environment to ensure delivery of quality services. This issue has been raised by Alabama Laundry which alleges that Tennessee laundry has been reluctant in inspecting the sites where it will perform the services. The claims by Alabama Laundry concerning its award for the contract are unjustified. Alabama laundry should leave the authority of awarding contracts to the contracting officer (Dembling, 1987).
The responses by the GAO on the allegations of Alabama are essential in ensuring harmony and order in contract management. Based on the report, determination of responsibility lies in the business and is beyond reasoned review, hence challenging the allegations by Alabama Laundry. It is important to note that issues of fraud and corruption are the main factors inducing review of affirmative determination of responsibility. It is essential for the setting of minimum standards on expertise and responsibility so as to ensure satisfaction of all bidders to a contract. The allegations on the basis of unsatisfactory performance are null, since they are not resolved under bid protest procedures. All the allegations by Alabama are unfounded and unsatisfactory for review or termination of the country. It should be noted that for contracts to be successful and satisfactory to all stakeholders, the set standards of responsibility, inspection of the site, satisfactory performance, and quality should be administered in the selection process (Dembling, 1987).
The Federal Acquisition Regulation (FAR) offers good regulatory provisions for enhancing contract performance. FAR gives guidelines on contract formation, acquisition, planning and administration. Government operations on procurement are highly guided by the FAR systems, hence ensuring order in contracts. As noted by King (2012), FAR systems provide unified procedures and policies for contract acquisition, planning and administration (King, 2012).
The need for adequate evaluation of contracts to determine viability and efficiency has been emphasized by FAR. FAR systems call for timely evaluation and quality data standards. This is aimed at ensuring the satisfaction of all parties and maintenance of high quality standards. Regular assessments of ongoing contracts have also been advocated for by FAR systems. This should be complemented by assessments of past performance so as to certify the performance of the contractors. The concepts of cost control, timeliness, technical quality control, business relations, and report of accordance to contract terms have been clearly stated by FAR systems. It is an obligation of all contractors to observe these standards so as to ensure success and satisfactory results. The mode of terminating contracts, changing scope of work, making payments, conducting testing, inspection, and delivering of services have been explicitly provided for by FAR. This is important in ensuring smooth acquisition, planning and administration of contracts (Cohen & McKendrick, (2005).
In light of the GAO report about the protests of Alabama Laundry, the worth and applicability of FAR regulations is evident. The provisions of FAR, 520203-13 (b) (3) (i) on business code of ethics in contracts and program compliance is applicable in the case of Alabama Laundry. It is necessary for business organizations involved in contracting process to observe ethics. The need for internal control systems is vital in ensuring satisfaction of all players. Adherence to internal controls ensures the provision of quality services. Adherence to internal controls helps in provision of contracts in a fair manner as well as facilitates dispute resolution (King, 2012).
The information offered in the report concerning the protests by Alabama laundry is satisfactory in making opinions and recommendation. The report has adequately reviewed the contracting procedures and the status of each bidder. The response offered on the different allegations is adequate. The information presented in the report dismissing the need for review is adequate. Alabama Laundry’s Allegations does not meet the threshold for review. The contracting officer followed the set standards and guidelines in awarding the contract. The issues of cost and responsibility have been catered for in awarding the contract. This is sufficient in justifying the contract and dismissing the allegations of Alabama Laundry (Meyer, 2010). The same organization, GAO, could be observed from the aspect of Federal Acquisition Regulations (FAR) using a different report. The second case here looks at a summary of the GAO report on performance and accountability with respect to the Federal Acquisition Regulations. The report is established from the 2012 fiscal year.
Federal Acquisition Regulation or FAR include set of rule governing contractual agreements and acquisition processes in the US. The acquisition process is the way in which the government purchases goods or services. The process involves recognition as well as acquisition planning, the contract formation, and the contract administration. Government personnel are regulated by the FAR system (Federal Acquisition Regulation, 2005). The GAO being a government body is also regulated by FAR and is required to publish reports on its contract performance. Contract performance ensures a smooth execution of contracts in which case the parties in a contractual agreement have to adhere to the contractual terms and condition. The Government Accountability Office (GAO) is run in a way that its acquisition activities and contracts are respected by all parties to a given contract in accordance with the FAR. The GAO oversees various contracts in the US and therefore provides various reports based on contact performance.
The report starts with establishment of the GAO mission in this case as acting to support Congress in meeting its various constitutional responsibilities while observing the Federal Acquisition Regulations. This way, the mission acts as a ground of improving the GAO performance in acquisition and contractual agreements and ensures that the federal government is accountable for the welfare of all Americans (GAO-13-3SP, 2013). It aims at examining public funds use in purchasing goods and services. The report also evaluates federal policies as well as the provision of various assistances to help the Congress in good decision-making as required in contracts and agreements (McKendrick, 2005).
The Report asserts that in fulfilling the GAO’s Mission, resources are organized and managed in order to support its four broad strategic goals including addressing challenges, responding to changing security threats, enhancing global independence, and transforming the US federal government in its effort to address national challenges. These goals are part of its strategic focus in accordance with FAR (Federal Acquisition Regulation, 2005). In fulfilling the mission of GAO, the organization maintains a highly trained team of workforce in various disciplines. The fiscal year 2012 saw its headquarters in Washington D.C. accommodating 2,960 employees with the rest being deployed in eleven field offices in the US.
The GAO report shows many accomplishments in the 2012 fiscal year. At least 13 of the 15 organization’s performance targets were reached. Examples, in this case, include identification of $ 55.8 billion that benefited the federal government, the return of $105 in every US dollar spent, as well as 1,440 improvements in its programs. Implementation of recommendations by the federal agencies amounted to 80% with over 2/3 of the issued products gaining recommendations (GAO-13-3SP, 2013). Testimonies were not met 159 hearings were testified with a third or more being testified on fraud risky areas.
The report indicated various challenges, especially in management. Two challenges in this area were brought out including human capital challenges and challenges in improving engagement efficiency. Solutions these challenges included hiring staff to fill the gaps in various senior positions. The solution to engagement problems involved developing new system of performance appraisal and enhancing telework programs (GAO-13-3SP, 2013). After initiation development strategies, significant progress was realized on all areas including resource utilization.
Determination of the GAO progress and the achievements in meeting the Congress needs or the nation, quantitative measures were used to assess the organization’s performance. Targets for the GAO performance measures were established by examining the GAO’s past performances and its external factors influencing their work. Discussion with senior executives on what is likely to be established in the next fiscal year of 2013 whereby achievements could be made by adjusting the targets and adjusting the GAO’s level of funding (Michigan Contract Connect, 2013 ).
The report is adequate in providing all the information need about the performance contract and its application. It is often required that are transactions or acquisitions are subject to inspection (Atiyah, 1979). This is seen in the GAO report were the FAR regulations are followed accordingly by the GAO. In contract performance, hearing complaints from state agencies is required. The Federal Acquisition Regulation is there to ensure this aspect is practiced as well as governing payment procedures, modification of contracts, and issues concerning assignments (Barnett, 2003).
Atiyah, P. (1979). The Rise and Fall of Freedom of Contract. Clarendon : Clarendon Press ISBN 0-19-825342-7.
Barnett, R. E. (2003). Contracts. Aspen : Aspen Publishers.
Cohen, N. and McKendrick, E. (2005). Comparative Remedies for Breach of Contract. New
York: Prentice Hall.
Dembling, P. (1987). Decision: Southern Industrial Laundry d/b/a Alabama Laundries and
Linen Supply. Retrieved on 30th Nov 2012, from: http://www.gao.gov/assets/420/413106.pdf
GAO-13-3SP. (2013, February 15). Summary of GAO’s Performance and Accountability Report Fiscal Year 2012. Retrieved February 28, 2013, from http://www.gao.gov/products/GAO-13-3SP
Federal Acquisition Regulation. (2005). Federal Acquisition Regulation (FAR). VOLUME I , PARTS 1 TO 51.
King, C. (2012). New Federal Acquisition Regulations Regarding Contractor Business Ethics
Compliance Programs and Disclosure Requirements. Retrieved on 30th Nov 2012, from: http://www.arentfox.com/publications/index.cfm?fa=legalUpdateDisp&content_id=1856%20class=
McKendrick, E. (2005). Contract Law -Text, Cases and Materials . Oxford : Oxford University Press ISBN 0-19-927480-0.
Meyer, L. (2010). Non-Performance and Remedies Under International Contract Law,
Principles and Indian Contract Law. New York: Peter Lang.
Michigan Contract Connect. (2013 ). Contract Performance. Retrieved February 28, 2013, from http://www.michigan.gov/micontractconnect/0,4541,7-225-48677-20048– ,00.html
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