Inspection and Acceptance. Can Inspection be contracted out?

[1102ByMistake]

I have a program person who wants to contract out the Inspection part for small wastewater construction projects. Basically have a contractor verify quantities, and adherence to the scopes of another contractor.   Inspection I assume would be an inherently government function, and this would be a nono but i cannot find any literature that says one way or another.

 

[ji20874]

Generally, it is fine to contract out inspection services — that is not inherently governmental.  FAR subpart 7.5 discusses inherently governmental.  Note that inspection and acceptance are different, and we’re talking about inspection.    

[C Culham]

Try a read of this thread, and all of its references.   I think it will help a lot.  I do understand it speaks to COR/COTR but I think you can use it to determine how your situation on "inspection" would fit in.

 

 

[Constricting Officer]

1102ByMistake,

Acceptance must be completed by the government: FAR 46.101 states, ““Acceptance” means the act of an authorized representative of the Government by which the Government, for itself or as agent of another, assumes ownership of existing identified supplies tendered or approves specific services rendered as partial or complete performance of the contract.”

Also, FAR 46.502 make it very clear:

Acceptance of supplies or services is the responsibility of the contracting officer. When this responsibility is assigned to a cognizant contract administration office or to another agency (see 42.202 (g)), acceptance by that office or agency is binding on the Government.

It does define this as services and supplies. I know of nothing directly tied to construction. I think we can reasonably agree that the same guidelines should apply.  Would be a bad business practice to let the contractor tell us it is good-to-go. 

Inspection/testing is another matter:

FAR 12.208 Contract quality assurance.

“Contracts for commercial items shall rely on contractors’ existing quality assurance systems as a substitute for Government inspection and testing before tender for acceptance unless customary market practices for the commercial item being acquired include in-process inspection. Any in-process inspection by the Government shall be conducted in a manner consistent with commercial practice.”

FAR 46.202-2 Government reliance on inspection by contractor.

(a) Except as specified in (b) of this section, the Government shall rely on the contractor to accomplish all inspection and testing needed to ensure that supplies or services acquired at or below the simplified acquisition threshold conform to contract quality requirements before they are tendered to the Government (see 46.301).

(b) The Government shall not rely on inspection by the contractor if the contracting officer determines that the Government has a need to test the supplies or services in advance of their tender for acceptance, or to pass judgment upon the adequacy of the contractor’s internal work processes. In making the determination, the contracting officer shall consider-

(1) The nature of the supplies and services being purchased and their intended use;

(2) The potential losses in the event of defects;

(3) The likelihood of uncontested replacement or correction of defective work; and

(4) The cost of detailed Government inspection.

 

[General.Zhukov]

1) Inspection is, at least, closely associated with inherently governmental functions.  From FAR 7.503's list of what is inherently governmental 

• v) Administering contracts (including ... accepting or rejecting contractor products or services)

 

[1102ByMistake]

That COR/COTR thread is a great read, and thanks for the FAR references. 

[ji20874]

FAR 7.503(c)(12)(v) points to acceptance as being inherently governmental.

FAR 7.503(d)(17) points to inspection as generally being not inherently governmental.  

Note that inspection and acceptance are different, and we’re talking about inspection.    

[FAR-flung 1102]

What  inspection clause should government use when a (third party) contractor performs the inspection? Would it be a problem that "government" is written all over the standard inspection clause used for construction, 52.246-12? 

My guess is no. And I'd advise seeking a legal opinion, before the government might use the clause "as is"and maintain the view that inspection by (third party) contractor is how the government chooses to performs its inspection, what of it?...what would be the issue if the construction contractor does not seem to lose any rights by this practice. 

 

 

[joel hoffman]

On 7/3/2019 at 9:09 AM, 1102ByMistake said:

I have a program person who wants to contract out the Inspection part for small wastewater construction projects. Basically have a contractor verify quantities, and adherence to the scopes of another contractor.   Inspection I assume would be an inherently government function, and this would be a nono but i cannot find any literature that says one way or another.

 

See. 46.401 (e):  “Government inspection shall be performed by or under the direction or supervision of Government personnel.”

See also agency supplements or implementing regulation/policy. 

Putting the above in the active tense: ‘Government personnel shall perform or direct or supervise government inspections.

My interpretation is that you would have to have hands on supervision or direction of contracted inspection services, not just let them have a free hand.

We (USACE) often used (and they still use) outside professional service contracts to augment QA personnel, particularly where specialists are needed. 

 

[FAR-flung 1102]

Well, Joel, the inspection clause for construction cited above arguably does cover the concept of government direction you cited at FAR 46.401(e)...that direction is explicitly provided by the Contracting Officer as at FAR 52.24612 paragraph (b): "...All work shall be conducted under the general direction of the Contracting Officer and is subject to Government inspection and test at all places and at all reasonable times before acceptance to ensure strict compliance with the terms of the contract." 

and at FAR 52.246-12 paragraph (d):

"The presence or absence of a Government inspector does not relieve the Contractor from any contract requirement, nor is the inspector authorized to change any term or condition of the specification without the Contracting Officer’s written authorization."

[ji20874]

The use of contractors to perform surveillance and inspections for federal contracts is a well-established and long-standing practice.  The FAR clearly identifies inspection as not being an inherently governmental.   Use of terms like "Government inspection" and "Government inspector" in FAR part 46 and the part 46 clauses cannot be read to limit inspection functions to Government employees -- rather, Government inspection is inspection done by or for the Government (in contract to contractor inspection) and Government inspectors are persons who do Government inspections (in contrast to contractor inspections).  FAR part 46 and the part 46 clauses speak to both Government and contractor inspections -- both the Government and the contractor may provide for inspections and inspectors by contract.

Note that inspection and acceptance are different, and we’re talking about inspection.  

[joel hoffman]

11 hours ago, FAR-flung 1102 said:

Well, Joel, the inspection clause for construction cited above arguably does cover the concept of government direction you cited at FAR 46.401(e)...that direction is explicitly provided by the Contracting Officer as at FAR 52.24612 paragraph (b): "...All work shall be conducted under the general direction of the Contracting Officer and is subject to Government inspection and test at all places and at all reasonable times before acceptance to ensure strict compliance with the terms of the contract." 

and at FAR 52.246-12 paragraph (d):

"The presence or absence of a Government inspector does not relieve the Contractor from any contract requirement, nor is the inspector authorized to change any term or condition of the specification without the Contracting Officer’s written authorization."

I was answering the original question. 

[joel hoffman]

11 hours ago, FAR-flung 1102 said:

Well, Joel, the inspection clause for construction cited above arguably does cover the concept of government direction you cited at FAR 46.401(e)...that direction is explicitly provided by the Contracting Officer as at FAR 52.24612 paragraph (b): "...All work shall be conducted under the general direction of the Contracting Officer and is subject to Government inspection and test at all places and at all reasonable times before acceptance to ensure strict compliance with the terms of the contract." 

FAR-Flung, the “work”  that “shall be conducted under the general direction of the contracting officer” refers to the contract work. The word “work” isn’t referring to “government inspection and test”.

”Definition: Work includes, but is not limited to, materials, workmanship, and manufacture and fabrication of components.”

Unfortunately, the government wrote it in the typical “governmenteze” passive tense so that the acting party is unidentified.

Translation:  =>  “The contractor shall conduct all of its work under the general direction of the contracting officer.“

Such work includes all contract work, including the construction contractor’s required inspection system. 

It doesn’t refer one way or the other to how the government may test and inspect other than to say that the contractor’s work is SUBJECT TO government inspection and test...  =>  “The government MAY inspect and test all work at all places and at all reasonable times prior to acceptance.” 

Thus, this clause doesn’t have anything to do with 46.401 (e) or identifying who will inspect or test on the government’s behalf. 

The Army Corps of Engineers used to have its own test labs, on-site labs and testing personnel for government testing on civil works projects through the early 80’s but those are almost gone. We have used contracted testing labs for government tests on non-civil works projects since at least the 70’s. 

I performed government QA soil and compaction testing on my first military construction project for USACE in 1980 because we had an on-site government lab at a nearby civil works project.

Plus I had learned how to perform the tests in my College soil mechanics,  engineering class 12 years before that, had some hands-on experience as an Air Force pavement engineer and I wanted to refresh my skills. 

I maintain that government inspection personnel have little knowledge or skill in inspecting soil and compaction or concrete/asphalt paving operations without having familiarity with and on-going hands-on experience with sampling and testing of such construction materials. 

[FAR-flung 1102]

Thank you Joel. 

The practical case for contractor involvement in government inspection is one that I'd hate to lose whether  due to failure of imagination, ignorance of available professional practices, or lack of curiosity about historical context.

[joel hoffman]

14 minutes ago, FAR-flung 1102 said:

Thank you Joel. 

The practical case for contractor involvement in government inspection is one that I'd hate to lose whether  due to failure of imagination, ignorance of available professional practices, or lack of curiosity about historical context.

No worries here about losing the ability to use contractors in government inspection (and testing) as needed. Reduces the number of otherwise FTE government employees with cost of full time benefits and retirement costs. 

[joel hoffman]

I had forgotten but during my first year on active duty in the Air Force 1971-1972, I was the project engineer on a Military Family Housing construction project at an Air Base in California. My lead inspector was our just retired AF Civil Engineering Squadron deputy base civil engineer (retired civil service) who worked under contract and he had an assistant. They were technically under my supervision. I was a green 2LT. 😃

[Retreadfed]

16 hours ago, joel hoffman said:

They were technically under my supervision

Was this a personal services contract?

[joel hoffman]

It was 1971. I don’t know. They had assigned duties. They reported their results to me as the P.E. I did not assign them daily duties. They had been there for 8 months before me. I replaced a Captain.