LIMITED WARRANT STUDY QUESTIONS

LIMITED WARRANT STUDY QUESTIONS

Pleaseailistaiandaidescribeaitheaitwoaitypesaiofaiincentiveaicontracts.ai-aians-
FixedaiPriceaiIncentiveaiFirm
-
aiAaifixedaipriceaicontractaiwithaiprovisionaiforaiadjustmentaiofaiprofitaibasedaionaicompariso
naiofaitotalaifinalainegotiatedaicostaiandaitotalaitargetaicost.
-aiElements:aiCeilingaiPrice,aiTargetaiCost,aiTargetaiProfit,aiShareaiRatio
-aiPointaiofaiTotalaiAssumption
-
aiContractoraicanaiincreaseaiprofitaidollarsaiandaiprofitaipercentageaibyaireducingaicostaibel
owaitargetaicost.

CostaiPlusaiIncentiveaiFee
-
aiCostaiReimbursementaicontractaithataiprovidesaiforaitheainegotiatedaifeeaitoaibeaiadjusted
aibyaiaaiformulaaibasedaionaitheairelationshipaiofaitotalaiallowableaicostsaitoaitotalaitargetaico
sts.
-aiElements:aiTargetaiCost,aiTargetaiPrice,aiTargetaiMin/MaxaiFee,aiShareaiRatio
-aiRangeaiofaiIncentiveaiEffectiveness
-
aiContractoraicanaiincreaseaifeeaidollarsaiandaifeeaipercentageaibyaireducingaicostaibelowait
argetaicostaidownaitoaitheaimaxaifeeaiposition.

Whataiareaitheai3aitypesaiofaiincentives?aiWhichaiofaitheseaiincentivesaiisaimandatory?ai-
aians-Cost,aiPerformance,aiSchedule;aiCOSTaiisaialwaysaimandatory


Whataiisaiaai"Services"aivs.ai"Supply"aitypeaicontract?ai-aians-
Services:aiDirectlyaiengageaitheaitimeaiandaieffortaiofaiaaicontractoraiwhoseaiprimaryaipurpo
seaiisaitoaiperformaianaiidentifiableaitaskairatheraithanaifurnishaianaiendaiitemaiofaisupply.aiW
henaiweaiareaibuyingaiaaiservice,aiweaiareaibuyingaisomeone'saitime,aieffort,aiand/
oraiknowledge.aiWeaiareaibuyingaiaaisolution,ainotaianaiendaiitem.aiAnyaideliverablesaiunder
aiaaiservicesaicontractaiareaiincidental.
"1.aiRequiresaiContractor'saitimeaiandaieffort
2.aiFocusaionaiaailevelaiofaiwork
3.aiDeliverablesaiareaiincidental,ainotaitheaiobject"

Supply:ai"Supplies"aimeansaiallaipropertyaiexceptailandaioraiinterestaiinailand.aiItaiincludesai(
butaiisainotailimitedaito)aipublicaiworks,aibuildings,aiandaifacilities;aiships,aifloatingaiequipme
nt,aiandaivesselsaiofaieveryaicharacter,aitype,aiandaidescription,aitogetheraiwithaipartsaiandai
accessories;aiaircraftaiandaiaircraftaiparts,aiaccessories,aiandaiequipment;aimachineaitools;
aiandaitheaialterationaioraiinstallationaiofaianyaiofaitheaiforegoing.
"1.aiEndaiitemaiwithaiintrinsicaivalue

,2.aiDeliveryaiisaiobjectaiofaitheaicontractaiandaitheaibasisaiofaipayment

Contractaitypeaiisaibasedaionaitheaiprimaryaipurposeaiofaitheaieffortaiifaiitaiisaiaaihybridai(inclu
dingaibothaisuppliesaiandaiservices)."

Howaitoaidetermineaiifaiaaicontractaiisai"services"aiorai"supply"?
aiWhataiisaitheai"Servicesaivs.aiSupplyaiTool"?ai-aians-
Determineaiifaiaaicontractaiisaiservicesaioraisupplyaibyaideterminingaitheaiprincipleaipurpose.
aiIsaitheaiprincipleaipurposeaitoaiprovideaiaaitaskaioraianaiobject?
aiYouaicanaiconsideraitheaiamountaiofaimoneyaispentaionaieachaiportionai(aiofaisupplyaiandai
service),aibutaishouldainotaibeaitheaisoleaideterminant.

Theai"Serviceaivs.aiSupplyaiTool"aiisaianotherairesourceaitoaihelpaiCOsaidetermineaitheaipri
ncipleaipurposeaiofaitheaiacquisition.aiItaiisainotaimeantaitoaimakeaitheaidecisionaiforaitheaiC
O,aiCOaimustaistillaiuseaitheiraibestaijudgementaiinaimakingaithisaidetermination.aiThereaiar
eai3aisequentialaimodelsaithataimakeaiupaitheaitool:aiTablesaiwithaiKeyaiWords,aiDecisionaiT
ree,aiandaipre-
solicitationaichecklist.aiTheairesourceaiisailocatedaionaitheaiAiraiForceaiservicesaisharepoint
aisite.


PleaseaidefineaiandaiexplainaitheaidifferencesaibetweenaiaaiSOWaiandaiaaiPWS.aiWhichaid
ocumentaiisaiusedaiforaiperformanceaibasedaiacquisition?ai-aians-
AaiSOW,aiStatementaiofaiWork,aiisaiaairequirementsaidocumentaithataidescribesaitheairequir
edaiworkaitoaibeaiperformed.

AaiPWS,aiPerformanceaiWorkaiStatement,aiisaiaaistatementaiofaiworkaiforaiperformance-
basedaiacquisitionsaithataidescribesaitheairequiredairesultsaiinaiclear,aispecificaiandaiobjecti
veaitermsaiwithaimeasureableaioutcomes.

AaiPWSaiisaiusedaiinaiperformanceaibasedaiacquisitions

AaiPWS-
1.aiDescribesaitheaiworkaiinaitermsaiofaitheairequiredairesultsairatheraithanaihowaitheaiworkaii
saitoaibeaiaccomplishedaioraitheainumberaiofaihoursaitoaibeaiprovided
2.aiEnablesaiassessmentaiofaiworkaiperformanceaiagainstaimeasureableaiperformanceaista
ndards
3.aiReliesaionaitheaiuseaiofaimeasureableaiperformanceaistandardsaiandaifinancialaiincentiv
esaiinaiaaicompetitiveaienvironmentaitoaiencourageaicompetitorsaitoaidevelopaiandaiinstitute
aiinnovativeaiandaicost-effectiveaimethodsaiofaiperformingaitheaiwork


SCENARIO:aiYouraiprogramaimanageraicomesaitoaiyouaiwithaiaaicomplexaiservicesairequir
ementaidetailedaiinaiaaiSOW.aiTheaiestimatedaivalueaiisai$1.2M.aiShouldaithisairequirement
aibeaidetailedaiinaiaaiPWSaioraiSOW?aiWhy?ai-aians-
TheairequirementaishouldaibeaidetailedaiinaiaaiPWSaibecauseaiitaiisaiperformanceaibasedai(
overaiSAT),aiunlessaiexemptaifromaiperformanceaibasedaiservicesaiacquisition.

, Brieflyaidescribeaiaaisubcontractingaiplan.ai-aians-
Toaiensureaithataismallaibusinessesaihaveaitheaimaximumaipracticableaiopportunityaitoaipar
ticipateaiinaicontractaiperformance.aiContainsaisubcontractingaigoals,aidescriptionaiofaieffor
tsaitheaiofferoraiwillaimakeaitoaiensureaithataismallaibusinessesaihaveaiequitableaiopportunit
yaitoaicompeteaiforaisubcontracts,aietc.

Whenaiisaiaaisubcontractingaiplanairequired?ai-aians-
(1)aiInainegotiatedaiacquisitions,aieachaisolicitationaiofaioffersaitoaiperformaiaaicontractaithat
aiisaiexpectedaitoaiexceedai$750,000ai($1.5aimillionaiforaiconstruction)aiandaithataihasaisubc
ontractingaipossibilities,aishallairequireaitheaiapparentlyaisuccessfulaiofferoraitoaisubmitaian
aiacceptableaisubcontractingaiplan.aiIfaitheaiapparentlyaisuccessfulaiofferoraifailsaitoainegoti
ateaiaaisubcontractingaiplanaiacceptableaitoaitheaicontractingaiofficeraiwithinaitheaitimeailimit
aiprescribedaibyaitheaicontractingaiofficer,aitheaiofferoraiwillaibeaiineligibleaiforaiaward.


(2)aiInaisealedaibiddingaiacquisitions,aieachaiinvitationaiforaibidsaitoaiperformaiaaicontractaith
ataiisaiexpectedaitoaiexceedai$750,000ai($1.5aimillionaiforaiconstruction)aiandaithataihasaisu
bcontractingaipossibilities,aishallairequireaitheaibidderaiselectedaiforaiawardaitoaisubmitaiaais
ubcontractingaiplan.aiIfaitheaiselectedaibidderaifailsaitoaisubmitaiaaiplanaiwithinaitheaitimeaili
mitaiprescribedaibyaitheaicontractingaiofficer,aitheaibidderaiwillaibeaiineligibleaiforaiaward.

(3)aiEachaicontractaimodificationaithataicausesaitheaivalueaiofaiaaicontractaiwithoutaiaaisubc
ontractingaiplanaitoaiexceedai$750,000ai($1.5aimillionaiforaiconstruction),aishallairequireaith
eaicontractoraitoaisubmitaiaaisubcontractingaiplanaiforaitheaicontract,aiifaitheaicontractingaioff
iceraideterminesaithataisubcontractingaiopportunitiesaiexist.

Exceptions:
(1)aiSmallaibusinessaiconcerns;
(2)aiPersonalaiservicesaicontracts;
(3)aiContractsaioraicontractaimodificationsaithataiwillaibeaiperformedaientirelyaioutsideaiofaith
eaiUnitedaiStatesaiandaiitsaioutlyingaiareas;aior
(4)aiModificationsaithataiareaiwithinaitheaiscopeaiofaitheaicontractaiandaitheaicontractaidoesai
notaicontainaitheaiclauseaiatai52.219-8,aiUtilizationaiofaiSmallaiBusinessaiConcerns.

Whataiareaitheaidifferentaitypesaiofaisubcontractingaiplans?ai-
aians-"Commercialaiplan"aimeansaiaaisubcontractingaiplanai(includingaigoals)aithataicovers
aitheaiofferor'saifiscalaiyearaiandaithataiappliesaitoaitheaientireaiproductionaiofaicommercialaiit
emsaisoldaibyaieitheraitheaientireaicompanyaioraiaaiportionaithereofai(aie.g.,aidivision,aiplant,a
ioraiproductailine).


"Individualaisubcontractingaiplan"aimeansaiaaisubcontractingaiplanaithataicoversaitheaientir
eaicontractaiperiodai(includingaioptionaiperiods),aiappliesaitoaiaaispecificaicontract,aiandaiha
saigoalsaithataiareaibasedaionaitheaiofferor'saiplannedaisubcontractingaiinaisupportaiofaitheai
specificaicontract,aiexceptaithataiindirectaicostsaiincurredaiforaicommonaioraijointaipurposesa
imayaibeaiallocatedaionaiaaiproratedaibasisaitoaitheaicontract.