Monday, August 10, 2015

What are Undefinitized Contract Actions (IUCAs)

 Undefinitized Contract Actions (UCAs) are contracting vehicles that allows contractors to begin work on a contract before a formal contract is issued. There are many reasons who UCAs are necessary but most of the time its because of an urgent need for a particular item or service. The process from drafting a solicitation to awarding a contract can take many months depending upon complexity. We've seen cases that exceed a year. Some UCAs are change orders where the Government needs to change some element of a contract specification but does not want to unavoidably delay production.

UCAs are generally considered high risk to the Government because by the time negotiations commence, many of the costs have already been incurred. That makes UCAs very similar ot cost-type contract.

Because of the high risk nature of UCAs, there is a high bar for contracting. The contracting officer must prepare an approval package that includes:

  1. Documentation for why a UCA is required,
  2. A detailed explanation for the need to begin performance before definitization,
  3. Address the adverse impact on agency requirements that would result from delays in beginning performance,
  4. Identify the risk of using a UCA and the means by which the Government will mitigate such risk,
  5. Identify and justify the specific contractual instrument to be used
  6. Establish limitations of the obligation of funds, and
  7. Provide the definitization schedule of agreed-upon events that support timely definitization.

Sometimes the Government will request the contractor to help prepare the documentation package - especially for establishing price ceilings (need estimates that only a contractor can provide) and definitization milestone schedules (need to make sure that the contractor will /can support the schedule). It wouldn't be prudent for the Government to establish a milestone schedule independent of the contractor.

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