Jump to content
The Wifcon Forums and Blogs

joel hoffman

  • Content count

  • Joined

  • Last visited

Posts posted by joel hoffman

  1. Construction CO, were the DBO and the IG describing the applicable clause or clause in reference to your example of the redesign of the fire suppression system?  

    I could see where the applicable clause for a time extension due to delays to the critical path of the schedule between the time of the discovery of the beams above the ceiling and the time it took to redesign and issue a change to construct the revised design would be under the defaults clause and associated delay costs (but no profit) would be paid as a constructive or ordered partial suspension of work. I’d have to do some research to see whether that also applies to delays for redesign time due to a differing site condition. 

    But I won’t spend the time   searching my files and CAB resources if that isn’t the context of their opinion. I used to subscribe to “Construction Claims Monthly” and to various textbooks on construction delays and yearly updates but didn’t retain them all when I retired from full-time contract admin, mods, claims, and source selection. 

    I will say that I read some case law or Nash and Cibinic, etc. on how to handle situations where the contractor is delayed waiting for the government to issue a revised design. Any additional time and equitable adjustment for difference in costs to construct the revised design versus the time and cost to construct the original design would be covered under the Changes or Differing Site Conditions clause(s).  

  2. Paragraph (b) of the clause provides for a time extension for various enumerated excusable delays. It doesn’t address monetary relief for such excusable delays. For the time extension to be compensable would generally require coverage under another clause.

    For instance, the Suspension of Work clause authorizes a cost adjustment for a government delay of unreasonable length (assuming that the delay cost isn’t otherwise concurrent with an unexcused contractor delay). However, it doesn’t authorize a time extension.  The Defaults clause is used to provide the associated time extension. 

    Thus, both clauses are cited in the mod providing a cost adjustment and a time extension due to a government ordered or constructive delay to the completion period. 

  3. Not only strange but possibly improper use of a government contract to extend the pricing and/or availability of the supplies to some future period of funding? Don't know if the definition of "money laundering" would fit.  However, it would seem that somebody should examine the appropriations law aspects of the arrangement and perhaps the contract cost principles and procedures, especially if contractor 2 is marking up contractor 1 costs and/or adding finance costs to its prices.  

    Also - what if contract 2 is not used to buy all of the inventory purchased under a government contract 1?  It would seem that contractor 2 is free to directly sell products purchased under a government contract as a result of government's negotiated pricing and delivery terms, to the public, essentially as a commercial distributor.  

  4. If you are looking to subcontract, and the prime Isn’t willing to negotiate, you can either  accept or reject it.  I don’t know what you mean by the term “recourse”, here. 

    We don’t know whether there are any DOL minimums associated with the position or if the prime’s offer would cause you to violate any such minimum with respect to your ability to have any leverage in negotiating a higher rate.

  5. 6 hours ago, MV2009 said:

    .Since these internal items require an in-depth look and assessment of the organizational, which cannot be provided here. I was seeking an answer to the following:

    How do you promote competition in markets where suppliers do not seem very interested in responding to solicitations? Are there items in the notice or at the industry day event that need to be explicitly written or said to promote feedback and questions from industry? 

    MV, you asked a broad question.  

    I’m wondering what type of acquisitions you are referring to.  You mentioned uninterested “suppliers”.  If you are experiencing a lack of interest across all types of acquisitions, then it would seem to me that few firms want to deal with your organization. You should want to become a “great customer”. 

    I can say that a simple answer from my perspective and experience is to “make the solicitation attractive to industry”;  read your solicitations from a supplier’s perspective; treat suppliers fairly with respect and honesty; and make prompt payment for goods and services provided. 

    As for “how to” make the solicitation attractive to industry, it depends upon the type of acquisition but frame the requirement so as not to restrict competition. Use reasonable evaluation and selection criteria.  Don’t over complicate the acquisition process and keep industry response costs as low as possible. Make prompt selections and awards.

    Don’t go on “phishing expeditions - effectively  use market research before issuing solicitations. Seek industry feedback during your research. 

    In summary, to promote competition, you must become an attractive customer. 

  6. 38 minutes ago, ji20874 said:

    Thanks, Vern.  Joel, we're only talking about up to 60 days.  In a claim situation, as we're discussing here, it is perfectly reasonable to address everything in a single final decision within 60 days.  So the contracting officer need not bifurcate the claim to deal with the easy portion, for example, 10 days after receipt and the difficult portion 60 days after receipt.  But if the contractor thinks there is any undue delay by the contracting officer in rendering a decision on a claim, FAR 33.211(f) already provides the remedy.  

    I have learned from experience that some contracting officers are too eager, too hasty, to give away money to contractors, with or without an understanding of correct principles.  I don't know that this is the case here, but I do advise caution and due diligence in these matters.

    ji, are you saying that a CO decision within 60 days,  must include the final settlement or that the settlement is unilateral?  I don't think so.

  7. 35 minutes ago, Vern Edwards said:

    In extreme cases, such behavior might be considered a form of "economic duress" and evidence of a lack of good faith and fair dealing. I don't think that ji20874 was suggesting it in that way. He was merely recommending caution and due diligence. However, I agree with Joel that if claim issues are severable, and one issue can or effectively has been settled, then partial settlement and payment is just and appropriate. 

    No disagreement with that.  Since this is a topic under the "For Beginners Only" Forum category, I would also suggest caution and due diligence.  However, I don't recommend automatically taking a full 60 days to render a "decision" on the merit of a claim - which doesn't necessarily include final settlement or payment  of the amount within that time. The government  shouldn't unnecessarily drag out the reimbursement process.

    As D_Wess has indicated, "[t]hese are small companies that really don't have the ability to float the Government, so we're hoping a two tier decision is acceptable."

    EDIT: Posted before I saw Vern's post immediately preceding this.  I agree that the  clause is indefinite and the third paragraph mixes reimbursing the contractor for repairs and charging the contractor for government repairs.

    In reading the clause think that it would be reasonable to expect reimbursement to be for loss, damage or destruction similar to an insurance company's liability to another driver's vehicle in the event of an accident involving it's insured client.  

    I've been able to get the other driver's company to reimburse me for what it would take to buy a similar replacement vehicle, considering age, condition, etc.  , market availability, etc.   I couldn't get reimbursed for a new replacement vehicle, nor didn't settle for ACV or trade-in value of my car.  I was able to negotiate the cost of a one year newer replacement vehicle than mine because it wasn't possible to find one of the same year and model in the same condition as my vehicle. 


  8. I think that ji’s suggestion to check for insurance coverage that might be available to offset some of the contractor’s costs is a good idea.  

    However, I don’t necessarily agree in purposely delaying settlement of a known liability in a sum certain amount in this case,  where you are uncertain of entitlement or possible amount for “loss of use”,  in order to gain a perceived advantage in the overall negotiations. 

    I am assuming that the contractors can substantiate their claimed replacement costs and that some reasonable depreciation of the destroyed equipment has been considered. 


  9. 8 minutes ago, ji20874 said:

    Here's a thought--

    Instead of contracting office staff keeping these spreadsheets, why not simply require that the contractor's invoice include a spreadsheet correctly detailing all the previous invoices and payments under the contract?  Then, providing the correct spreadsheet becomes a matter of a proper invoice.

    ji,, that is not a condition of the contract payment or prompt payment clauses in order to be paid or to be considered an "acceptable invoice". And - why pay additional taxpayer funds, if applicable,  to require a contractor to perform that additional effort?  A contractor likely won't know when the KO or COR approved the invoice for payment, if the government is using internal software system for payments.

  10. If you will be having the surety complete the project, all the terms of the contract (except any modifications thereto addressed in the takeover agreement), including the warranty will continue. You memorialize that continuation in the takeover agreement.   Also address any open issues that are reserved by either party.  Of course, the contract terms also address the rights of the surety (same as the Prime Contractor).

    The surety will likely hire a completion (sub)contractor to do the work but you still deal contractually with the surety.  

  11. I will add -  As part of the takeover agreement, you will establish a new contract completion date for the Surety to complete the project. If it is after the current completion date in the terminated effort, you will have to determine what, if any, excusable delays must be considered to establish what the revised completion date would have been, absent a default termination.  I have seen and have also negotiated the payment of liquidated damages as part of the takeover agreements with sureties.  All of the agreements were prior to completion and, in most of those cases, prior to the current contract completion date. 

    For the substitute contracts, we made the surety bring the checks to us before the KO would sign the agreements . 

    The LD’s totaled over $400k for the three substitute contract agreements and the first one that I saw done that way in our office in Saudi Arabia  was for $5 million. 

    Assuming that the TFD is valid, the government has broad rights and also has the responsibility to mitigate costs, damages  and time to complete the project. 

  12. I thought it was covered in Nash and Feldman’s or Nash and Cibinics “Administration of Government Contracts” but didn’t see it this morning.  However, the references that I mentioned should be a good start.  A TFD terminates the contractor’s right to proceed with the work but doesn’t terminate all the rights of the parties under the contract.  The Surety is still obligated to the government and that obligation includes any guarantees or warranties. The surety will most often undertake completion to minimize their costs but sometimes offers the government ( I forgot the term for the type of agreement) a new surety and prime contractor. I negotiated numerous takeover agreements with various sureties and three of the substitution agreements with one surety that just wanted out of the responsibility to complete the contracts.  The surety proposed new prime contractors for the three projects and new surety(ise).  

     In either case, you will generally negotiate the terms and conditions for the completion of the project.  In my experience, the original surety was required to retain responsibility for warranting any work by the original contractor performed prior to the substitute contract.  

    Of course, under a surety take over agreement to complete the project, you will require the surety to assume any warranty or other guarantees. 

    They agreed to those terms.  

  13. See also the SF 25 Performance Bond.  The bond is effective during  the life of any guaranty required under the contract.  

    Are you familiar with the Surety’s rights and obligations under the performance bond?  

    You can perform a Google or other search for articles that discuss the legal rights of the parties under a construction contract termination for default. 

  14. When I negotiated takeover agreements with the surety to complete the project or negotiated agreements with the surety for another surety and contractor to assume the project after a default termination, we required the original surety to remain responsible for the work of the original contractor, including warranting that work after completion and acceptance. If the surety completes the project, the warranty applies to the entire works. 

    A default termination doesn’t extinguish the government’s warranty rights or the surety’s obligations under the Default clause. See 49.402-3 (6) and 52.249-10 (a).