On How Not to Draft Agreements
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2 Things I Have Learned As An Arbitrator On How Not to Draft Agreements Barbara Kinosky Centre Law & Consulting
3 Agenda and Sources Agenda 1. Advantages and Risks 2. Key Questions & Considerations 3. Related Documents & Examples 4. Applicable Laws Sources Federal Acquisition Regulation Agency Regulations 3
4 Key Subcontracting Agreement Advantages Grow Your Business (Size, Revenue, Experience) Past Performance Record Lower Costs More Opportunities Prime Contracts 4
5 Key Subcontracting Agreement Advantages Qui Tam Lawsuits Affiliation No Priv 5
6 Key Questions Why subcontracting agreements are important? What is in my teaming agreement? What is my relative bargaining strength? What type of an agreement should I get (cost reimbursable or not?) What is my dispute resolution process? - Prime sub - Sub-government 6
7 Key Considerations 1. Specific Commitment (% of Work) 2. FAR Flow Down Provisions 3. Exclusivity 4. Proposal Preparation 5. Payment Options 7
8 Key Considerations 6. Warranty and Indemnity 7. Termination for Convenience 8. Confidential / Proprietary Information 9. Statement of Work 10. Non-Compete 8
9 Key Considerations 11. Error Correction 12. Rights in Data & Return of Materials 13. Responsibility for Delays & Government Shut-Downs 14. Invoicing and Payment 15. Stop-Work 9
10 Key Considerations 16. Delivery Orders 17. Interference with Employees 18. Duty of Avoid Conflict of Interest 19. Restrictions on Competition 20. Ownership of Employee Developments 21. Post Subcontracting Agreement Outlook 10
11 Subcontract & Related Documents Modifications Schedules Attachments Drawings Special Conditions General Conditions Teaming Agreements Non-Disclosure Agreements 11
12 Other Applicable Laws The False Claims Act & Qui Tam Truthful Cost or Pricing Data The Buy American Statute The Trade Agreements Act The Prompt Payment Act Anti-Bribery / Anti-Kickbacks State / Local Laws 12
13 Caution Each subcontracting arrangement calls for a customized subcontracting agreement Do not use the same template for all situations A quick legal review is always recommended 13
14 Examples of BAD Subcontracting Agreement Clauses Payment Terms and Conditions Review it carefully (arguably the most important clause of any contract) Payment Terms: Subcontractor will invoice Prime Contractor for services performed as specified. Each invoice will provide a level of detail to reflect the amount applicable to each individual site location and be accompanied by time keeping records to substantiate the invoice amount. Invoices will be mailed to: Termination: This Subcontracting agreement shall commence 14
15 Examples of BAD Subcontracting Agreement Habits Definitions Define key contractual terms and use consistent definitions This Agreement between Parties. This Subcontracting agreement is effective on... This DOCUMENT will be terminated. This Contract states that The venue for this Subcontracting Contract will be 15
16 Examples of BAD Subcontracting Agreement Habits Consideration Always include language of consideration Whereas, Prime Contractor was awarded a task order issued under contract #, to provide services to the U.S. Government Whereas, in accordance with this Subcontract, the Parties desire to set forth the work to be performed by the Subcontractor, Now, the Parties agree as follows: 16
17 Examples of BAD Subcontracting Agreement Habits List all key documents Create an index of all attachments The Subcontracting Agreement consists of this Agreement and all attachments, schedules, and relevant documents on the table right next to the water fountain. 17
18 Examples of BAD Subcontracting Agreement Habits Contractual Obligations Control your contractual obligations Subcontractor agrees and shall be bound to Prime Contractor by all of the terms of the Agreement between Prime Contract and the Government. Consider whether you should exclude insurance, indemnity, certain warranties, etc. Know all your obligations 18
19 Conclusion Subcontracting Agreements Are Important Start with the Teaming Agreement Customize it to Fit Your Particular Situation A Quick Legal Review is Highly Recommended 19
20 Contact Information Barbara Kinosky Centre Law & Consulting LLC Disclaimer: This presentation is for educational and information purposes only. For specific questions, contact an experienced government procurement attorney. 20
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