joel hoffman

Could you please elaborate; are you referring to multiple rates for one person or position?

If their subcontract is CPFF they must invoice their incurred direct costs as part of their total invoice reimbursement. If you negotiated a fixed fee, isn’t it possible for you and the government to determine what the negotiated indirect cost rate portion of the invoice is? The government can confirm to you that the invoiced indirect rates are what they agreed to, can’t they? I don’t understand how the sub can refuse to provide you the budgeted direct costs either.. How do you manage a cost reimbursement subcontract without being able to track their earned value (formal or informal- doesn’t matter)? You have the contract award. If they are a direct competitor and “won’t budge”, can’t you select another company that you can work with?

Excellent approach. Takes a lot of time at one per day but that could probably be adjusted, depending upon numbers and complexity…

As a post-script to this discussion: If your organization states in a solicitation that the government will utilize a consensus evaluation and rating method, my strong recommendation is NEVER require or allow individual source selection team or evaluation team members to make or include a preliminary score or rating for any factors, subfactors, etc. in any notes that they create. Technical evaluators and advisors should never make rating recommendations. That’s the SS team’s role. The formal evaluation factors, rating system, etc. will provide rating criteria that the consensus evaluation process will use to document the official rating. The assigned ratings should reflect the underlying, documented basis for each rating. Start with the listed criteria, then assign a rating, not the other way around. If there is a protest, the protesting party’s attorneys will seize upon differences between an individual preliminary rating and the team concensus rating, attempting to confuse or show confusion and inconsistencies in the evaluations. Anybody who has participated on an evaluation team will know that there are often initial thoughts that get hashed out and refined during a consensus discussion and formal evaluation and may differ from individual first impressions based upon level of one’s understanding, evaluator background knowledge and experience, etc. Lessons learned from leading or participating in approximately 90 source selections. Of those only three were protested. All those protests were eventually unsuccessful. In two of them, the protestor’s counsel tried to make an issue between initial individual notes and the concensus evaluation without success. But it was very frustrating for the government team, lawyer and KO and necessitated additional time and effort that could have been spent on other work.

Thanks, formerfed. I’ve been trying to make those points.

Consistent with Professor Nash’s position with respect to the distinctions between an REA and a claim, it makes little sense to submit a claim for an issue such as this if the government agrees that the warranty call was invalid and agrees that David’s firm is entitled to an equitable adjustment similar to a pre-acceptance invasive inspection situation. For a contractor claim, David would have to request a contracting officer’s decision. See FAR 33.2, 41 USC Chapter 7, and the disputes clause of the contract. If this was a government “claim”, the contracting officer must make a KO Decision. A KO would be a fool to make a KO decision at the time of a warranty call, especially one that turns out NOT to be a valid warranty matter. It would seem clear here that the government never inspected the roof and didn’t know the source of the leaks. Thats all an unnecessary waste of time and effort and won’t foster good will on either party’s part. ”33.204 Policy. The Government’s policy is to try to resolve all contractual issues in controversy by mutual agreement at the contracting officer’s level. Reasonable efforts should be made to resolve controversies prior to the submission of a claim…” Im done trying to reason with Carl. I hope David can understand that there are more satisfactory methods to achieve what he is asking for than submitting a claim, which would require a request for a KO decision on a matter that probably isn’t in dispute. And I doubt that the government has initiated a claim, which would have necessarily required a KO final decision.

Don’t know. Usually the govt or govt using agency calls the contractor and follows up in writing to come out and fix something. I never had a KO submit a claim under the warranty, unless the contractor refused to return. If it is a govt claim, it has no merit here. David can respond with an REA , documenting the factual situation and requesting an equitable adjustment. He doesn’t have to submit a claim at that point. The parties can negotiate a settlement… If the govt doesn’t agree that it is responsible or that David is entitled to an equitable adjustment, if it is a govt claim, the KO would issue a Decision, wouldn’t they? The. David could appeal… If not a govt claim and govt disagrees over paying, David can elevate it to a claim and the KO would have to issue a Decision, then the appeal, etc. etc. As a claim, lots of expense for both parties over a relatively small amount of money…

According to the scenario, The government knows or should know that the contractor’s material and workmanship are not defective. The government also knows that its HVAC system caused the ceiling or roof leaks. It also knows that it can’t prove that there was a defect in David’s work or that its own system didn’t cause the leak. Thus there was no basis for requiring the contractor to come back and do what it did. It’s not a valid government warranty “claim” (improper term) or call. It’s not called that in the clause or FAR warranty discussion and prescription. The Corps of Engineers policy is to avoid “claims” if there are other means to resolve issues. A claim is generally a legal action, while issues such as this can hopefully be resolved administratively. If it can’t, it can be elevated into a formal claim.

See paragraph (h) of the Inspection of Construction clause at 52.246-12 for a similar remedy when the government orders the contractor to tear out in-place work prior to acceptance in order to determine whether hidden materials and workmanship meets the contract requirements - and it is found not to be defective. An equitable adjustment is provided for. Why wouldn’t an equitable adjustment be provided for post acceptance directed additional work that wasn’t the responsibility of the contractor?

Carl’s example is a claim because the parties disputed whether or not the contractor was responsible, so the contractor had to claim reimbursement and establish that the contractor wasn’t responsible for the damage repair. Here the government apparently agrees that the contractor’s material and workmanship had nothing to do with the leaks. The governments direction to inspect? and repair the leak was, in effect, a constructive change because the warranty of construction clause wasn’t enforceable for the situation. The government’s own building system failed and the government apparently agrees. The contractor can simply comply with changes clause, notifying the government that it considers the direction to … a constructive change (see paragraph (b) of the Changes Clause) because it wasn’t responsible for the leak or responsible for the costs to ….(describe what efforts and expense were involved) , and request an equitable adjustment to the contract price. There should be absolutely no need to handle the matter under the Disputes clause and process. The contractor would have to file a claim and request a contracting officer’s decision and on and on, etc.

deleted. Pushed the quote button by accident.

Im saying that the contractor could assert a constructive change order under the Changes Clause. The contractor can request an equitable adjustment without resorting to filing a Claim under the Disputes Clause. I’m assuming that the government would agree in such an instance. If it doesn’t, then the contractor can file a claim under the Disputes clause or pursue a breech of contract action.

I would add that the government asserted that acceptance was not final under 52.243-12, pursuant to its rights under the warranty of construction clause at 52.243-21. Thius all remedies available under the contract should be available. Davids defense under the contract terms could be a breech of the Warranty clause resulting in a government directed change to the work..

Under the Inspection of Construction Clause at FAR 52.246-12, paragraph i, “Acceptance shall be final and conclusive except for latent defects, fraud, gross mistakes amounting to fraud , or the governments rights under any warranty or guarantee.” The government breached its rights under the warranty clause at 52.246-21. It directed the contractor to return to the job site, causing it to incur additional costs to come, carefully inspect and determine the cause and location of the leak and that it wasn’t due to the contractor’s material and workmanship. It was entirely independent of the roof work- leaks in another building system. Thus government failed to meet its legal burden of proof after final acceptance that there was a failure of the contractor’s contractually required material or workmanship, causing the leak. I believe that this breech would allow a contractor to exercise its rights under the contract, in lieu of a breech of contract claim. In this case, it appears that the government hadn’t inspected the roof because David’s crew had to clean the area to determine where the leak emanated from (rereading the description in the initial post). In essence, I believe that the government directed additional work under the warranty clause that wasn’t required. Thus it could be considered a change to the contract requirements under the Changes Clause, entitling the contractor to an equitable adjustment. Note that I tried but was unsuccessful in researching the paragraph long referenced case law where the government couldn’t prove that the material or workmanship was faulty under the Warranty clauses in the Fourth Edition of Nash and Cibinic’s Administration of Government Contracts. I no longer have access to the old BCA books or to Westlaw, etc. Those cases should describe what the contractor’s rights for redress were. As a reminder, I’m not a lawyer or a paralegal. David can consult one. In a referenced case that I reviewed, the contractor did submit a claim for an equitable adjustment under paragraph i of the inspection of construction clause (asserting that acceptance was complete and final when government didn’t prove that the contractor’s material and workmanship was cause of the problems). However, the government reasonably proved that the failures and additional expenses were the result of failures in material and workmanship. In David’s case, there were likely minor costs but aggravating and resulted in diversion of time and resources from other work. Under a breach of contract action, these could be recoverable but would require litigation. David’s question primarily concerns what to do in future situations where this occurs. My advice was to react to the governments warranty call direction in the future by asking them to show or prove that the problem, I.e., failure- damage, etc. was the result of the contractor’s material or workmanship and that the government didn’t cause the problem. This would include asking them whether they made any physical inspection to try to determine the source or possible cause of the problem or condition. .

See https://www.acquisition.gov/dfarspgi/pgi-215.404-71-4-facilities-capital-employed. The KO or ACO is responsible to complete the form DD-1861…

Oh, a request for an equitable adjustment is likely viable here. We used to pay for REA’s like this situation, when our customers would call back a contractor for an improper warranty call. There was no point in arguing. The contractor would be right and entitled to compensation. David can submit a claim or an REA. Either one is a written assertion and will likely eventually result in entitlement and payment. The dollar value is low. I understand why he doesn’t want to make a big deal out of it.

When a contractor is sensitive to customer relations, as David alluded to, they will often prefer to submit an REA rather than a claim, which is handled as a dispute. Especially for a relatively small amount of money. A claim, involves much more effort and formal processes than an REA. On one of our Chemical Weapons Disposal Plant systems contracts, our systems contractor submitted a $163 million REA on long standing issues rather a claim. And no, they didn’t insist on payment of interest as a defacto claim. In fact, this wasn’t uncommon with many of our medium and large contractors.

Thanks, Bob. Sometimes original posters don’t realize that respondents often spend considerable time researching sources for answers (even when we know the answer) and time in formulating responses. It would be nice to at least know if we answered the OP’s question or not or if they found an answer elsewhere. The basis of my answer is that the Warranty of Construction clause is definitely applicable to an invalid warranty call and to the contractor’s right to submit a claim or REA. The rights and responsibilities of both parties under the warranty clause survive final acceptance and payment. The contractor should ask the government whether they have investigated and determined that the contractor’s workmanship or materials are defective and that the government didn’t cause or contribute to any failure or defects. Here, the government could and should have at least cleaned and inspected the suspected area and leak source before making a warranty call. If a home owner makes a warranty call or even a service call, they should expect to pay at least service call fee or more, if the cause isn’t a material or workmanship failure. That’s common business practice - “that’s life”. Edit add: interpreting contracts is similar to interpreting the Bible. One can’t always interpret contract clauses or Bible passages literally- there are often extrinsic contexts.

Yes, indeed. You would need a “Philadelphia lawyer”. China and Russia are no go.

Upon notification, first ask them if they have verified that:

Just saw this thread. The Warranty of Construction Clause establishes rights - and corresponding responsibilities - surviving final acceptance.** When the government “asserts that the contractor has breached a warranty, it assumes the burden of proving all elements of its claim”, quoting Globe Corp, ASBCA 45131, 93-3 BCA at 25,968 and other cases. The government must prove, among other things, that “furnishing the defective material or workmanship was the responsibility of the contractor” and that “it [government] did not cause or contribute to the failure or defects.” - citing Joseph Penner, GSBCA 4647, 80-2 BCA at 14,064. **From the Fourth Edition of Nash and Cibinic’s Administration of Government Contracts, Chapter 9 Inspection , Acceptance and Warranties, see under III Post Acceptance Rights, B. Warranties, Notice and Burden of Proof, b. Government’s Burden of Proof. There is a half page paragraph, citing cases where the government failed to fulfill its burden of proof. The warranty rights and burden of proof survive final acceptance, thus the contractor should be able to submit a claim pursuant to an improper warranty call by the government David, from your post, it appears that your firm clearly established (proved) that the cause of the leaks wasn’t related to your work or workmanship. David, did this answer your question? This was not an uncommon experience during my experience, where the installation would fail to prove that a problem was a valid warranty issue.

I had personal experience using this remedy back in 1981 or 1982 as a project engineer on a contract to construct facilities for a Solid State Instrument Landing System at Columbus AFB, MS. A contractor employee repeatedly failed to wear a hard hat until I would direct him to. Finally, one day he just refused and asked me what I was going to do about it. I told him he was repeatedly violating the Contract Safety and Occupational Health requirements and encouraging others to do so. Thus, I directed him to leave the job site, get off the AFB and not return. Fortunately, the job foreman agreed with me. I escorted the young man to the gate and told the gate guards not to let him back on the Base. Also fortunately, our Corps District’s policy was that any Corps rep on a project had the authority to stop the work at the immediate location due to deliberate and/or serious safety violations and to direct necessary corrective actions. Im sure that I overstepped my authority but the guy was a troublemaker, there were no cell phones then, my Area Office was many miles away from the Air Base and I was the sole USACE employee on the Base. I was a relatively new Corps employee but had 10 years of construction contracting experience in the Air Force and outside world. My GS-14 supervisor and our GS-15 Area Engineer backed me when I explained the situation to them by land line after escorting the culprit out the gate… My Area Engineer once “fired” the site manager for Arundel-Atchinson-Ball JV on the Columbus MS. Lock and Dam construction contract (directed that he be removed him from the position) around the same time. But it was for being a total, insulting, obstinate jerk. The JV protested to the KO, who was the District Engineer/Commander (Army Colonel, later BG). I remember that the firing got reversed because only the KO had the authority, unless specifically delegated, to remove the site manager for being “objectionable”. The amusing thing about that occurred a year later, when I met a Quality Control site manager’s girl friend (he was on a different contract) who happened to be the jerk’s daughter. She told me that she detested him and said he deserved to be fired!!

Good cite with clear explanation and reasoning, thanks Carl.

Yes, not knowing the specific problems results in speculation… I was thinking this afternoon while working in one of my hunting camp food plots about this statement. It reminded me of paragraph (c) of FAR construction contract Material and Workmanship Clause at 52.236-5. “(c) All work under this contract shall be performed in a skillful and workmanlike manner. The Contracting Officer may require, in writing, that the Contractor remove from the work any employee the Contracting Officer deems incompetent, careless, or otherwise objectionable.” One could write similar coverage for service contracts, if you unable to integrate other solutions.

No