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ji20874

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About ji20874

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  1. For a construction contract, that is exactly the sort of risk that a contractor promises to bear when it bargains for a contract that includes the clause at FAR 52.236-7, Permits and Responsibilities. See the last sentence of that clause.
  2. For what is already on contract (such as labor and materials to design and build the building), you should not make any price increase -- the contractor guessed wrong, and didn't take any steps to lock in prices early, and agreed to bear those risks when the contract was formed. That's fair. But you can give a time extension. But for the equitable adjustments resulting from change orders, Government stop-work orders, Government delays, and so forth, you can tend towards the generous side of the reasonable continuum. For these, the contractor's proposed pricing will be based on today's labor and material realities. That's fair. There should be plenty of opportunity for your contractor to be successful.
  3. Elves can still contribute towards a happy Christmas for a struggling contractor -- contracting officers don't want a default. For example, in the situations like the original poster mentioned in a follow-up comment, when there are Government delays and change orders in the contract, the contractor can negotiate hard for equitable adjustments with the Government, and the contracting officer can give much of the benefit of any doubt in those negotiations to the contractor. Additionally, the contracting officer can tend towards the generous end of the reasonable continuum with matters such as progress payments and/or liquidation rates, provisional billing rates, and so forth, if the contracting officer has some sense of assurance that the contractor intends to honor its contract commitment. There are other ways the contracting officer can be patient and sometimes half close one eye. But the contracting officer simply cannot increase the contract price because of an unusually severe weather event in a FFP contract using the standard FAR clauses. It would be unfair to do so. I wonder about the offeror who lost the contract because its price was just a little too high because it prudently included costs for risk (such as for a hurricane and hurricane aftermath in a hurricane area during hurricane season). We have to be fair. It would be unfair to make the winning contractor whole for its own decision not to obtain insurance, such as builder's risk insurance, especially considering the plain text and the litigation history of the standard construction clause at FAR 52.236-7. But default is not the end of the matter -- there is always the surety and the performance bond to make sure the project gets completed. It is fair to administer the contract's T&Cs as the parties bargained for.
  4. This isn't true. But sometimes, in a contract, the contractor allows the Government to get away with things (just as sometimes, the Government allows the contractor to get away with things). It depends on circumstances and personalities. Then please, hire an attorney and let the attorney look at the paper copy of the contract and the stop-work order and everything else. WIFCON is a place to learn, not a place to prepare for litigation. Let your attorney figure out the basis for the future claim (or better, future request for equitable adjustment), and recommend actions you can take between now and Sep. 30 to protect your interests. You aren't even certain which clause in your contract is the basis for the stop-work order -- are you ready to be looking for a basis for a claim? You've already read here (repeatedly) that your company may file a request for equitable adjustment when the stop-work order is canceled or if a termination occurs (assuming the stop-work order was issued under a contract clause that allows for equitable adjustments, such as FAR 52.242-15). Your attorney can help you with that, and the cost for the attorney will be an allowable charge. Your attorney might point out that if you aren't allowed to resume performance, the stop-work order may be seen as a de facto termination order.
  5. Wasn't that a Pub.L. 85-804 situation? In 1998, the Secretary of the Army granted the anthrax vaccine contractor indemnity (immunity from litigation) under Pub.L. 85-804. I don't know remember all the details, such as price increase and advance payments, but those also would have been allowed under Pub.L. 85-804. EDIT: I found it -- Beyond the indemnity, the Army "provided a net $24.1 million in relief, including an $18.7 million interest free advance payment. The number of doses in the contract options was reduced from 7.9 million to 4.6 million. The price was increased from $4.36 to $10.64 per dose for Option Year I and from $2.26 to $10.64 per dose for Option Year II." See Statement by Robert J. Lieberman, Assistant Inspector General for Auditing, Department of Defense, before the Senate Committee on Armed Services on Defense Anthrax Vaccine Contracting, July 12, 2000 at https://media.defense.gov/2017/Apr/18/2001734011/-1/-1/1/000712RL.PDF.
  6. kathilou, Actually, we do care. "The contractor has been delayed on a number of occasions due to untimely responses to RFIs and design review, the hurricane and closure of the base, remobilization, an environmental design change that ended up not actually being needed, but held up the design process again until that was remedied, etc." Every one of these (except the unusually severe weather event) provides you with an opportunity to generous and helpful, if the contractor provided the appropriate notices contemplated by the appropriate contract clauses that would provide for equitable adjustment. But a Santa Claus contract modification to increase the contract price because of the unusually severe weather impact cannot be justified. It isn't a matter of caring. It is a matter of professionalism and correct principles.
  7. I’m not a cold-hearted person. Maybe one day we can have a discussion on ways contracting officers can be helpful to contractors in difficult situations — there are many. But a Santa Claus contract modification to increase the contract price because of an unusually severe weather event isn’t one of those ways.
  8. Oh, one other thing -- why hasn't the contractor contacted its surety for assistance? There is a performance bond, right? If the contractor does default, the performance bond will come into play, but the surety can look after its interests before a default occurs.
  9. Joel, I agree with your no. 9 conclusion. But I would add a couple of items to your listing of apparent facts. 8 1/4. The contractor elected not to purchase insurance or otherwise cover the risk it agreed to bear when the contract was formed in the contract clause at FAR 52.236-7, Permits and Responsibilities, and now seeks to shift the liability for that risk back to the Government. There has been no discussion of the contractor's seeking relief from other sources, such as SBA loans or other disaster relief. 8 1/2. Government employees in the local office seem eager to accept this liability, which is essentially a modification without consideration, without following the procedures for such an action as codified in Pub.L. 85-804 and regulated in FAR subpart 50.1. 8 3/4. No contract clause or other legal basis has been cited for the proposed increase in contract price, contrary to the constitutional stipulation that "No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law." No one in favor of making the contractor whole has cited any authority for their proposed generosity with appropriated funds.
  10. There really is no such thing as "Are they allowed...?" Whatever happens is what happens, and that is based on circumstances and personalities -- whatever happens may or may not be "allowable" under the contract or contract principles, but it still happens. Then, the parties deal with it, one way or the other.
  11. Other than Pub.L. 85-804, I am aware of no authority to increase the contract price for severe weather impact for a construction contract using the standard FAR clauses. Contracting officers are not supposed to play Santa Claus with taxpayer dollars.
  12. The contractor will be able to ask for an equitable adjustment when the stop-work order is canceled or when the government declares the contract to be finished.
  13. Who knows what would happen? That would depend on circumstances and personalities. If it is happening to you, please share some facts, and others here might be able to share insights. Services, supplies, or construction? What contract clause was used to issue the stop-work order (the clause already mentioned in this thread is just one clause that authorizes stop-work orders)? And so forth...
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