on Wednesday, November 08, 2000 - 06:20 pm:
What paragraphs of FAR 52.212-4 can be used for modification
authority in block C of the SF 30 when modifying a delivery
order written against a commercial contract? If the Government
does not accept nonconforming services, why would it not be
appropriate for the CO to use 52.212-4(a),
Inspection/Acceptance, to deobligate what now are excess funds.
Second part to this question. When can the modification
authority for a delivery order ride on the modification
authority used for the basic contract when the revisions to a
contract have to be carried over to the delivery order.
Vern Edwards on Sunday, November 26, 2000 - 10:18 pm:
Your questions are a little confusing, but I'll take a shot at
With regard to the first part, it appears that you have issued a
delivery order against a commercial items IDIQ contract and that
you have rejected the supplies tendered by the contractor. Is
that right? Now you want to deobligate the funds obligated on
the delivery order because the contractor has failed to perform.
Is that right?
If so, I think that you have to terminate the delivery order,
either for convenience or for cause, before you can deobligate
the funds. The fact that you have rejected the supplies tendered
does not necessarily mean that your obligations under the
delivery order are no longer in force. You cannot deobligate the
funds as long as your obligations remain in force. Once you have
terminated the contract, cite the appropriate termination clause
as the authority to deobligation the funds.
I'm not sure that I understand the second part of your question.
However, the authority to modify a delivery order is derived
from the authority in the basic contract.
on Monday, December 04, 2000 - 05:38 pm:
Vern, the answer to the second part of my question is what I
was looking for there. Thanks
A little more clarification for you on the first part of the
question. The requirement is for services and not supplies and
the period of performance is for 1 year with monthly invoicing
My office addended 52.212-4 to provide for a reimbursement of
funds if the contractor does not retain adequate numbers of
qualified employees to perform 100% of the Government's mission.
The Government is training the original contractor employees to
perform at the three qualification levels required by the
contract. There is cost associated to that training. If the
contractor does not retain those employees for a year after the
employee receives the training then the clause contains a
formula that figures the required reimbursement for the training
costs and training the replacement falls on the contractor.
Rather than pay the contractor and wait for reimbursement we
held the funds from the invoice in the month that a contractor
employee quit. Then comes end of year when the only way to use
those funds for other purposes is to get them deobligated and
back in the end users hands. Do you want to still consider this
a partial termination?
on Monday, December 04, 2000 - 05:57 pm:
As I understand it, you obligated the money for the training,
but withheld payment in the amount of the reimbursement that you
claim that the contractor owes you. So now you want to
deobligate that amount.
Based on your new information I would say that the clause which
entitles you to the reimbursement is the authority for the
deobligation. I do not think that any termination is involved.
A word of caution--make sure that you proceed in a manner that
is consistent with the terms of the clause that entitles you to
reimbursement. Does the clause require you to modify the
contract? If so, does it require a bilateral modification, or
can you do it unilaterally? Do you need to get the contractor to
agree to the reimbursement, or to the amount of the
on Thursday, December 07, 2000 - 05:26 pm:
We attempted to do a bilateral modification to the delivery
order to remove excess funds and sent it off to the contractor
with a definate suspense date with instructions that if we did
not receive signature that we would deobligate unilaterally. The
contractor has not challenged that decision. The IG challenged
the authorities used. Why would we addend a clause, when
allowed, and then not be able to use the authority the clause
was meant to provide? Thanks for your help.
Kennedy How on
Friday, December 08, 2000 - 12:45 pm:
Is the IG saying that your use of the reimbursement clause
was wrong? Or, are they saying that the situation doesn't
warrant the application of the clause?
As I'm reading it, the clause is there, the contractor didn't
keep the people around for the requisite time, the Government
can get reimbursement for those people, which you tried to do.
What is the IG objecting to here?
Some COs like to get Bilateral Mods on Unilateral actions; it's
a warm-fuzzy thing. It keeps the contractor in the loop, and
prevents them from being surprised.
I agree with Vern in that if you've withheld payment, then you
need to deobligate. The alternative is to pay the contractor and
have him cut a check back to you. The problem with this is that
the check is made to the US Treasury, and you lose it. We hated
to do that in our systems contract, because the program loses
the money. So, we horse trade it for something else. But, both
parties agree beforehand that this was a way to do it.
Contractors like it because it doesn't show up as an
"expenditure" of sorts; they hate having to give back money.