Assignment 5: Federal Contracting Activities and Contract Types
Angelina Brooks
Professor: Larry Murphy
Bus 315
December 15, 2013

My company’s mission is to offer stylish, great, affordable clothing to young men and women entering the world of business. I will offer customer’s a classy, stylish and a professional look for the business world. Clothes will be altered to fit customer’s shape and size in a variety of colors and options to solve fashion problems. My company’s vision is to help the younger generation realize that they can dress professional and still look good while in the business world. I will start out offering my product online and then eventually land a store within the mall where I can be exposed to different people of all ages, shapes and sizes. Starting out as a small business owner I will need as much support as I can to get started, which is my main reason for competing for a government contract. The government offers about 23% of their business to small business owners and as long as I can meet the government’s requirements at a fair and reasonable price, the government will limit competition to only small business owners as long as two or more small businesses are prepared to compete for contract which will provide a better business opportunity for my business. Also, having business with the government opens windows and doors for better opportunities. Government contracts save my company money, improve my performance and will promote my business. VectorCal is the producer of the navigation systems for drone and stealth drone aircrafts and sell their product directly to the US Government. VectorCal is the only company that can mass produce the navigation system for the government’s stealth drones which makes them a liable source to the government however; VectorCal does not get any kind of loyalty from the government. VectorCal’s reason for competing for the government contract is for the navigation system, the government is the only buyer, to see who’s willing to pay a higher price for their product, VectorCal market their products to other governments. Next, the military purchases large quantities of their product therefore, VectorCal is able to reduce the price of the system. Finally since this is the government, with the Prompt Payment Act VectorCal is guaranteed to be paid in approximately thirty days after the proper submission of the invoice.
Based on price, VectorCal was awarded a $6,724,859 firm-fixed-price contract for design, production, and testing of integrated bridge navigation systems equipment for the government. The grated Bridge Navigation System is a key upgrade in the hull, mechanical and electrical modernization package for the in-service ships. The program includes up to three new ships per year through fiscal year 2017. The new construction program is required to deliver grated bridge navigation systems to the respective shipyards as government-furnished equipment. Work will be performed at VectorCal’s facality and is expected to be completed by June 2014. Funding in the amount of $6,724,859 will be obligated at time of award. Contract funds will not expire at the end of the current fiscal year. This contract was competitively procured via Federal Business Opportunities with one offer received. VectorCal was the successful bidder because VectorCal researched the product the government was looking to purchase, by researching the product VectorCal knew exactly what the governments need were and VectorCal knew they were able to provide the government with these items. VectorCal took it upon themselves to contact the government to get as much information needed regarding the bid. VectorCal also found the small business administration website to be helpful; here they were able to find out who the current suppliers were and how the government was procuring goods and services. While on the web, VectorCal found it helpful to register on the Central Contractor Registration website, this is the database for government suppliers, vendors and this gave the government notice that VectorCal was ready to become one of their suppliers. Once VectorCal obtained a copy of the bid, VectorCal reviewed the bid to make sure they knew all the requirements needed to participate and understood the material and from there VectorCal proceeded to complete the bid. Angie’s Fashion Designs (AFD), a small business owner was recently awarded $100,000 fixed-price contract with the government to be a supplier of dress shirts/blouses. Under this fixed-price contract, AFD agrees to deliver shirts/blouses at a price not to excess the agreed upon maximum price. This contract requires the AFD to successfully perform the contract and deliver conforming supplies or services for a price agreed to up front. This firm-fixed price contract is suitable for supplies and services that can be described in sufficient detail to ensure complete understanding of the requirements by both parties and assessment of the inherent risks of performance. AFD was awarded this contract due to the willingness to work with and provide the government good services.
VectorCal and AFD are both eligible for the upcoming cost reimbursement contact for the government. There are several types of basic cost-reimbursement contracts. One in particular is the cost sharing contract; this contract will reimburse contractors agreed-upon share of its allowable costs. Meaning that whatever both parties agree upon the government will share the cost with the other party. An example, if either company agreed to include travel expenses in the contract at the time of negotiation, the government is willing to share that cost with the company as long as it is agreed upon. Both company’s must keep in mind that cost reimbursement contracts establish and estimate of total costs for purposes of obligating funds and stating a ceiling that the contractor must not exceed except at its own risk, what this means it that the government is carrying all or essentially all of the cost risk within this contract anything extra will be the responsibly of the contractor.
All costs are classified as either direct or indirect. Any job created by a contract, purchase order, task order, change order or similar transaction is treated as direct cost. Any other cost is treated as an indirect cost. During the production of the navigation system, the direct cost will consist of labor, material and special equipment. The labor cost is the time it took and effort put in place to create the navigation system and these cost can be calculated based upon the hours used to produce the system. To provide a breakdown of these costs, contractor can use the Work Breakdown Structure to better provide direct labor hours spent on this project. The direct material costs are the products that will be a part of the finished work. Example items used for the navigation system are Laser scanner, Doppler radar and a motion sensor, these items will be a part of the finished work for the navigation system. Also, let’s say special equipment is required for testing the system; contractor can include special equipment as direct cost. Since a small company will be producing the navigation system, the indirect cost will consist of overhead cost. Overhead cost for the production of the navigation system will include general operation cost which include the maintenance and up keep of the facility being used, utilities and salary of individuals producing the system. Without these cost, it will be impossible to produce navigation system.
With this information in mind, I see VectorCal being award the cost reimbursement contract. VectorCal has all the requirements in place; they have experience with working with navigation systems, experience with working with the government and a facility to produce the navigation system, the cost reimbursement contract will be a great fit for VectorCal.
Although winning a government contract is a great opportunity, it requires time, patience and hard work to be a successful supplier to the government.

Reference
BUS 315, Week 1, 2,3,4,5, 6, 7 &8 Scenario
Retrieved from https://blackboard.strayer.edu/webapps/portal
Retrieved from http://www.robotshop.com/en/navigation-board-ardrone.html
Murphy, John Edward, CPA, CPCM (2009) “Guide to Contract Pricing” 5th edition
Retrieved from http://www.defense.gov/contracts