The first question would be what would you do, and how would you answer his questions?
The second question is.. Isn't there something that states the contract is binding already because the contracting officer has signed it?
Is the vendor obligated to provide the services whether or not he signs the contract?
How would you address the insurance issue? The vendor is coming to the station and claims not to have insurance. I feel that the VAAR852.237-70 has to be included.
Your system kept saying that we had a bad code in the remainder of the Secenario Background so, it is incomplete
There is not enough information to address "how would you answer his questions?" The following responses are provided for your subsequent questions.
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1) It's not clear why both a "contract" and "purchase order" are included on the Award Notice. However, an offeror does not have to sign a purchase order (FAR Part 13 procurement) for an obligation to be created. If the offeror receiving the purchase order begins work on the Government requirement after receiving the purchase order, then an obligation between the Government and contractor legally exists. This is different from a "contract" (i.e., not a FAR Part 13 action), where the offeror is obligated to perform the work once selected for the award. See FAR 13.004 for more on this issue.
2) The vendor is not obligated to provide the services in the case of a purchase order. See the answer to the preceding question, and FAR 13.004.
3) According to VAAR 837.110, the clause at 852.237-70 must be included in contract for services. Unlike the FAR regarding its clause at 52.228-5, the VA Acquisition Regulation does not appear to exempt contracts below the simplified acquisition threshold. Agencies can set insurance requirements above and beyond what the FAR requires. I agree that it should be included in your case. Because this may be problematic for the vendor, you should consult with your office's legal counsel on the matter.