joel hoffman

Jamaal, please lay out an example  for me. 

How would they prove a positive? First, check to see if it is specifically allowed or required.

The burden is on the one proposing to modify the contract to determine whether or not it is prohibited if it isn’t specifically allowed. 

By the way:

“Generally, GAO and courts have ruled that ?open-ended?indemnification provisions in contracts violate 31 U.S.C. ? 1341. See e.g., Union Pacific Railroad Corp. v. United States, 52 Fed. Cl. 730 (2002); United States Park Police Indemnification Agreement, B-242146, 1991 US Comp. Gen. LEXIS 1070, Aug. 16, 1991 (stating that absent specific statutory authority, indemnification provisions which subject the government to indefinite or potentially unlimited liability violate the ADA); Project Stormfury, B-198206, 59 Comp. Gen. 369 (1980). To Howard Metzenbaum, B-174839.2, 63 Comp. Gen. 145 (1984); Assumption by Gov?t of Contractor Liability to Third Persons, B-201072, 62 Comp. Gen. 361 (1983); Reimbursement of the State of New York Under Support Contract, B-202518, Jan. 8, 1982, 82-2 CPD ? 2; cf. E.I. DuPont De Nemours v. United States, 365 F.3d 1367 (2004) (holding that the Contract Settlement Act of 1944 exempted certain contracts with indemnification provisions from operation of the Antideficiency Act).”

http://www.wifcon.com/discussion/index.php?/topic/1041-federal-government-indemnification-of-contractors/

On 3/15/2019 at 5:43 PM, Don Mansfield said:

BTW, FAR 1.102(d) places the burden on the naysayer when it comes to the exercise of authority. As such, please cite the law, executive order, or regulation that would prohibit the types of modifications that you described.

Your added edit is incorrect.

FAR 1.102 (d) places the burden upon the KO and the government members of the acquisition team to determine “if a specific strategy, practice, policy or procedure is in the best interests of the Government and is not addressed in the FAR nor prohibited by law (statute or case law), Executive order or other regulation”  before assuming that the strategy, practice, policy or procedure is permissible.

I mentioned examples of standard contractually established allocations of responsibilities or liabilities and asked if a KO could reverse those if, as you say, the KO “obtains consideration”. 

It is B.S. to say that the burden is on someone questioning the KO’s authority. It is the K.O.’s responsibility to determine if they are not prohibited from waiving or reversing contractually established roles, responsibilities or liabilities. The KO and their advisory team must be able to justify why they are modifying a contract.

See, for instance 1.602-2 (c) and agency supplements thereto.  I would also certainly hope that DAU teaches on the topic of legal sufficiency reviews - especially if a KO decides to modify the terms of FAR Clauses or other contractually defined. allocations of liability or risks. 

Perhaps you are a David Drabkin fan. I remember some of the differing opinions of Deidre Lee and Drabkin in one of our DAU Contracting classes in D.C. in the 1990’s. 

The lawyer needs to do their job and be your advocate, not throw up their hands and give up. 

Beyond that, suggest using past performance as a comparative factor . And suggest using the trade-off with price either equal in importance to all the other factors or price is significantly more important than non-priced factors. Good luck

On 3/15/2019 at 5:43 PM, Don Mansfield said:

I don't understand what the consideration would be in this scenario.

So, apparently , no. [contractor offers consideration if government will reimburse extra expense for a known site condition].

On 3/15/2019 at 5:43 PM, Don Mansfield said:

In the absence of some specific limitation on the contracting officer's authority in these circumstances, then yes. They would still have to comply with FAR 1.602-1(b) before exercising their authority.

I would advise you not to speak so broadly. That’s a dangerous answer. It implies that if a KO isn’t aware of a specific limitation of their authority they are free to modify any contract requirement. 

KO’s can not idemnify contractor’s from certain legal liabilities or responsibilities per various laws, including those examples that I cited.

For example, it ought to be obvious that  income taxes aren’t allowable expenses for reimbursement. If not obvious, read 31.205-41 (b) (1).

FAR 2.101 Definitions: “Unallowable cost means any cost that, under the provisions of any pertinent law, regulation, or contract, cannot be included in prices, cost-reimbursements, or settlements under a Government contract to which it is allocable.”

FAR 31.201-6   Accounting for unallowable costs.

“(a) Costs that are expressly unallowable or mutually agreed to be unallowable, including mutually agreed to be unallowable directly associated costs, shall be identified and excluded from any billing, claim, or proposal applicable to a Government contract. A directly associated cost is any cost that is generated solely as a result of incurring another cost, and that would not have been incurred had the other cost not been incurred. When an unallowable cost is incurred, its directly associated costs are also unallowable.”

Thats why a KO better damned well be able to cite their legal authority and justify why they are modifying a contract.  

Don - By the way, it wasn’t established or explained  that the color and delivery changes were for no cost or that the government “received consideration”.  May have been a credit change or a change involving increased cost. Might have paid for a shorter delivery schedule.

ji simply described the change...

34 minutes ago, Don Mansfield said:

Take ji's example from earlier in the thread:

The Government has given up its right to the delivery of 100 white items delivered in 60 days in exchange for 33 white, 33 red and 34 blue delivered in 45 days.

Don - Ok, that’s a simple “change”. 

Im thinking of other risks or responsibilities allocated to the parties by various contract clauses or by operation of law. 

For example, can the KO wave their magic wand to assume the otherwise contractor allocated risk, responsibility or liability “if they obtain consideration”? 

Can a KO turn a known,  underground condition into a “differing site condition” for consideration, then pay for the additional costs to perform the work on a fixed price contract?

Can a KO indemnify a contractor for possible public health risks or future employee illnesses due to possible release of toxic chemicals for an environmental remediation of RCRA site if they obtain consideration?  

Can the KO relieve the contractor of any liability for injury to the contractor’s employees or to the public due to unsafe practices if they obtain consideration? 

Can the KO make the government responsible for the impact of future corporate income tax increases on a fixed price contract if they obtain consideration? 

Those are some examples of many, many responsibilities or risks typically allocated to contractors by law, public policy and/or by standard contract clauses. 

13 minutes ago, Don Mansfield said:

Yes, provided they obtain consideration.

For example...? Me thinks you speak too generally.  

21 minutes ago, Retreadfed said:

Lionel said, "relinquishing legal rights serves as adequate consideration."  Legal rights are a property interest vested in the government.  Do contracting officers have the authority to divest the government of its property rights without such authority being granted in a contract clause?

As I said earlier, generally  - not without some specific authority to waive all or partial rights. 

2 hours ago, napolik said:

Even if the LPTA solicitation included a statement that the earliest submitted proposal would receive the award in the event that more than one proposal/ quote contained the same evaluated price, I suspect that a protest against this criterion would be successful. In my view, to base a source selection upon the timeliness of proposal/ quote submission would be deemed to be unreasonable since the timing of proposal/ quote submission has nothing to do with the integrity of the selection decision or with legislation addressing the resolution of ties (i.e. socioeconomic factors or drawing by lots). 

Yes, I agree. It’s an unreasonable criterion, is unrelated to minimum acceptable quality or to a better price and provides no additional value. 

Had I pondered it a bit more, my answer to the original question would have simply been - don’t mix a bilaterally agreed change to all the options (supplemental agreement), requiring Contractor’s signature with a unilateral mod action to exercise award of an option.(no Contractor signature involved). 

1 hour ago, coolarmydude said:

It's a tiebreaker decision, not an extra value determination. There is nothing anywhere that says this is wrong. 

Coolarmydude, have you ever read any GAO Protests  based upon the agency using unstated evaluation criteria to discriminate between proposals?

Try a Google Search , such as “ GAO Protest unstated evaluation criteria”. Then consider whether a “more timely proposal submission”amounts to using unstated evaluation criteria in the award decision.  

Edit: See where it has been used during proposal evaluation or during the selecting official’s award decision. 

1 hour ago, coolarmydude said:

It's a tiebreaker decision, not an extra value determination. There is nothing anywhere that says this is wrong. And there is no such thing as an "early submission." It's a timely submission.

Ok, then - you are in effect saying that an earlier or “timelier” submission is the best value and deserves to be awarded the contract - but didn’t state or suggest that to industry in the solicitation. 

Still improper.

Still sorry that you can’t grasp the distinction between providing equal chances for equally priced, acceptable proposals and giving ADDITIONAL CONSIDERATION  (“tiebreaker”)  for one supposedly being superior than another, introducing an arbitrary,  unstated, non-price factor.

I am familiar with “tie breakers” in sports, such as volleyball tournaments, to determine relative rankings. They are used to determine some RELATIVE order of merit in ranking the positions of teams with equal win-loss percentages in pool play for playoff purposes. They are always stated in the tournament rules.

Then - if all else fails as a discriminator - they flip a coin or draw straws. It’s called... CHANCE!!!

All otherwise “tied”submissions should have an equal chance for award. 

...unless the solicitation included language that social engineering (“public policy”) would be considered when selecting from equally priced, acceptable proposals. SB, SDB, Hubzone, etc.

Sorry that you can’t understand that.

On 3/13/2019 at 1:18 PM, coolarmydude said:

I would select the offer that was received before the other. That way, the decision is still purely based on the Offerors' efforts.

This is what coolarmydude proposed...

an unstated comparative merit factor in an LPTA where extra value is inferred for earlier proposal submission . 

There is no requirement or even a stated preference for early submission, dubious value associated with early submission; there may be possibility of mistakes; the proposal may be poorer or needlessly high not taking all the time needed to refine the proposal or to obtain best pricing ...

it is a valueless discriminator in a process where the only discriminator between acceptable proposals is - by definition - price! 

You would be introducing a consideration for “additional value” for early submission of otherwise equal proposals. Why is it so hard to understand that you are bastardizing the concept of LPTA? And what extra value is associated with a submission that came in before another one?

5 minutes ago, Don Mansfield said:

Trivia contest, arm wrestling, staring contest, to name a few.

Nope- unstated evaluation criteria that could  provide one firm an advantage over another firm. 

3 hours ago, coolarmydude said:

So is chance technical related or price related? <rhetorical question based on your response>
I'm not saying that it's not appropriate; I'm saying it's not the sole tiebreaker method either.

Any non-price consideration that gives one proposer an advantage over another - a better chance for award- unless stated in the solicitation - in an LPTA  - is unfair. The stated non-price criteria is “technically acceptable proposal by a responsible Offeror/proposer”.

In my opinion, the tiebreaker among technically acceptable (thus EQUAL) offers from responsible proposers with equal prices should be by chance -  some type of drawing. 

The above assumes that prices are fair and reasonable and within the budget. 

An exception could be made by conducting discussions,  advising the equal lowest priced proposers that there is a tie in the price competition and allowing them to revise their price proposal. This would be most appropriate where the proposals appear to be high, and/or above the budget.

Then, if there is still a tie,  select the winner by chance. 

Edit: I could be convinced to do the price revision opportunity among tied lowest prices before resorting to chance,  if that is considered fair. Just watched Final Jeopardy on TV.  Assuming that the government reserved the right to conduct discussions. 

Further edit: could that be considered some form of the dreaded and disfavored reverse auction if the tied prices are fair,  reasonable and affordable? 

An equal chance among equal, otherwise acceptable proposals is the most fair tiebreaker. 

Additionally- many warranted contracting officers in some organization (e.g., ACO’s) have limited authority to modify contracts - only under specific contract clauses.  

Besides that- if you can’t explain or otherwise justify why you are modifying a contract, you have little business being the the one to sign the mods.  

1 hour ago, napolik said:

If you do this under LPTA and if you determine a small business has unacceptable past performance, you must go to the SBA for a CoC. See FitNet Purchasing Alliance; B-410263; Nov 26, 2014.

That specific acquisition was a sloppily performed trade-off attempt.  However in a note in the decision, the GAO explained the point that Napolik is making. 

11 minutes ago, C Culham said:

With it noted that a warrant is numbered or at least that is the authority it is looking for!  No picture needed just as I have already stated check "Other" write in "warrant" and the "warrant number"!

Your signature as KO serves as your authority to sign the mod. A warrant number is unnecessary. That’s not what they are looking for. Sheesh. 

It’s one step above sealed bidding, the advantage being that we avoided awarding to the scumbags that we were plagued with early on in my federal career.  For the most part, they didn’t even bother competing. 

We were also able to weed out “fronts” in our SDB type set-asides. 

And true enough,  it only required a couple of us to read and evaluate the proposals. We asked for subject matter experts where necessary for key trades or systems compliance verification.

We also used it on tightly budgeted projects, where the customer couldn’t afford the bells and whistles or to pay more to get the gold star primes. 

The Air Force has a solid track record of putting Cadillac desires in solicitations with Yugo budgets, then wanting to use trade off methods to select the winner.  It was very misleading to industry, who thought that there would be adequate funding for the expressed wants.  Several of the best primes stopped participating in our Air Force design-build and construction best value trade-off competitions for several years 

29 minutes ago, here_2_help said:

Retread, I have tried to avoid responding. Alas, I am weak and must correct you. This is the kind of advice that gets contractors in trouble.

Of course you are CORRECT that CAS applies contract by contract. You can't have a noncompliance with a contract that is exempt from CAS.

HOWEVER, CAS and FAR require a contractor to be consistent in its cost accounting practices. A contractor, especially one that was recently a small business, would be foolish to establish two or more cost accounting systems or business units simply because only a few of its contracts were CAS-covered. Far better--and far more commonly--contractors have one and only one cost accounting system where all contracts are treated consistently (absent special allocations). Thus, if one contract is CAS-covered, then effectively all contracts are CAS-covered with respect to application of cost accounting practices. To do otherwise (without setting up a separate business unit with a separate cost accounting system) is to violate both the CAS rules addressing consistency as well as the FAR rules in Part 31 that also demand consistency with respect to direct vs. indirect cost determinations.

Thus, while you are pedantically correct you are, in practice, wrong.

Respectfully, H2H

Absolutely agree with you, Help. We had FFP construction contracts with several large Defense contractors and negotiated mods and changes, using their disclosure information and consistent with their CAS covered accounting systems. We also consulted regularly with their DCAA assigned “in plant” auditors.  

The warrant isn’t the “authority” that the Instructions for SF-30 is looking for...

If it were, there’d be a designated place for it on the form. That’s an internal government matter. Hang it on the wall or hallway. Make sure it is in the KO’s framed picture of themself, displayed  prominently.

I think the KO ought to hold up a copy of the FAR in the pic. 🤪

My point above was to point out that I generally wouldn’t mix a unilateral action with a bilateral action in the same mod. The unilateral action doesn’t require contractor agreement or (generally) its signature. 

As for the “slight reduction in services”, the OP described it as a change. It might be a severalble service that could be separately terminated for convenience but who knows. 

 Note that the instructions for SF-30 state that the KO “generally” signs supplemental agreement mods after the Contractor signs the mod form. Another reason not to mix mod types ... 

8 hours ago, coolarmydude said:

I would select the offer that was received before the other. That way, the decision is still purely based on the Offerors' efforts.

The discriminator- by definition - is price. All technically acceptable proposals are equal. And all technically acceptable proposals of the same price should have an equal chance for award. 

Then flip a coin or draw the winner from a bowl or whatever.