Sample Business Coursework Paper on SOP of Pre – Contract Agreement

SOP of Pre – Contract Agreement


            A contract is a mutual agreement between two or more parties which is legally binding, whoever violates risks the possibility of getting convicted (Stefan, 2006, P. 53). A pre – contract agreement therefore refers to the agreement between a contractor and a contracting officers or other individuals involved in the process of signing the contract. There are set of pre – conditions that are stated aptly for the purpose of regarding a document as an agreement or a contract.


 These sets of conditions include; a contract must be physically signed by the parties involved, and must be written to prove as valid documents that can be used in case of a breach of contract in the court of law. Moreover, it must be synchronized into the final contract. Therefore a pre – contract agreement acts for the purpose of enabling respective costs to be incurred before the effective date of a contract.

Agreement between the contractor and contracting officer

            Equally important is the agreement between the contractor and the contracting officer, which would either approve or disapprove the incurring of pre – contract costs. It is important to clearly outline and define the pre – contract costs that are anticipated to be incurred, the total costs for which these pre – contract costs would take and the duration in which these costs are to be incurred. Further, a contract letter that is duly signed by the parties involved has to be incorporated within the contract file which is considered official. All operations and procedures ought to be undertaken within the confines of the law and a detailed summary of the agreements ought to reflect on the precise use of the costs aforementioned. The contract period should not be breached. Finally, there is need for a critical review of the wordings of both the contractor and contracting officer to ensure accuracy and clear out the chances for errors and ambiguity.

Procedures in determination of the pre – contract agreement

            At onset, there is the determination of the Competitive Range which is primarily done after the examination of a range of factors. These factors relate to costs, non – cost factors and other technical factors with regards to the offerors. Before the determination of the Competitive Range, it is important for the contracting officer to conduct a meticulous review of the business section that have been forwarded. Moreover, the Technical Evaluation Panel (TEP) provides technical evaluation for these proposals of the business section.

The determination of the competitive range is therefore a transparent process in which the Competitive Range is picked from most proposals which are highly rated. Here the contracting officer makes the decision (Rose, 2015, P.49). At times the contracting officer may prefer that the number for the conducting of the efficient competition is superseded by the number of the proposals that are highly rated.  At times the contracting officer may prefer limiting the proposal number for the purposes of allowing for the efficiency of competition especially among the proposals which are highly rated.

Pre – contract agreement process is one procedure that requires lots of transparency to keep cases of breach at bay. Therefore, such acts as corruption and ethnicity have no place in the pre – contract agreement. A simple breach or ambiguity – lack of clarity in interpretation of the agreement – might lead to legislations, procedural rigidities which may delay the project crashing thus becoming costly in terms of time. Therefore each key player ought to take their role seriously to prevent delays or further costs which are not defined in the pre – contract agreement costs. Therefore, the contracting officer should review the business proposal of each offeror and determine business related issues that might ensure such as those regarding costs or past performance and the approach to management (Aibinu, 2008, P.47).

The Technical Evaluation Report ought to be accurately reviewed by the Program Office Representative and succinctly explained. All these are mark points in the process of pre – contract agreement and each team player taking an active role letting known the technical and financial hitches that might suffice at the implementation phase can be effective in allowing for preparation and the creation of contingency plans to offset such delays.


            Both the Technical Evaluation Report and the Technical Evaluation Panel ought to be completed before the Program Office Representative coordinates the efforts of the contracting officer towards the determination of the competitive range through scheduling of the advisory meeting. Secondly, the contracting officer then champions the distribution of Technical Evaluation report along with other important documents and an invitation meant solely for the advisory meeting. Further, both the program office and the contracting officer meet in order to clarify the cost implications and the hitches that might suffice before the meeting commences. Then, the POR along with the contracting officer clarifies the agenda and distribute to the advisory members mark points on the upcoming agenda.

            The advisory meeting is often chaired by the contracting officer while the advisory panel members are responsible for making recommendations. The contracting officer is also responsible for the selecting the offerors within the Competitive Range but within the confines of the law. Therefore, the contracting officer is a very significant person in both the selection of the Competitive Range and Pre – contract agreements in overall.

Pre – contract Cost Agreement

            The offeror must be in a position to explain the reasons for the pre – contract costs for the purposes of the pre – contract costs to be permitted. Therefore, the process is pegged to a set of pre – fixed procedural rigidities that have to be adhered to and these set procedures are mostly legally binding. Provisions in FAR 31.109 aptly puts it to interested and involved parties that there has to be mutual agreement in the signing of the Pre – contract cost agreements for the contract to be valid.

            Pre – contract costs are allowed and ought to be used by the contractor in the process of performing the tasks that have been agreed that the contract is meant to cover. Moreover, these costs are meant to cover a specific time period which proves significant in the completion of the contract. Moreover, the contractor must be accurate in determining the costs to be involved in the pre – contract cost agreements because not more than the stipulated amount in the contract is to be incurred at any cost. In the case of the government, there is no guarantee for the contractor to receive reimbursement in case there are extra charges incurred in the process of tackling the contract. This calls for vigilance and in – depth knowledge of the law to avoid disagreements that might suffice with regards to the pre – contract costs incurred.

Work Cited

Aibinu, AjibadeAyodeji. “Avoiding and mitigating delay and disruption claims conflict: Role of precontract negotiation.” Journal of Legal Affairs and Dispute Resolution in Engineering and construction 1.1 (2008): 47 – 58. Print

Grundmann, Stefan. The Architecture of European Codes and Contract Law. The Hague [u.a.: Kluwer Law International [u.a., 2006. Print

Rose, F.D. Blackstone’s Statutes on Commercial & Consumer Law 2015 – 2016. , 2015. Print