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I don’t think it applies directly to proposals at all. It seems to me that the clause applies to the company’s processes and procedures for its corporate estimating system whenever the contractor submits proposals (to public and private sector customers) in the expectation of receiving contract awards. It applies at the back-office or system level.

Joel, So, would you approve a payment to reimburse the contractor its actual costs for the erected scaffolding? Or would you approve a payment based on the percent of work complete represented by the erection of the scaffolding?

I'm not so sure. Regardless, the burden of proof is on the contractor rather than the Government, right? That's not the standard for making progress payments in a construction contract. This would not be a sensible argument. Under the clause at FAR 52.232-5, we don't make progress payments to contractors to reimburse actual incurred costs. Rather, we make payments based on estimates of work complete (such as, 5% complete = 5% payment, and 50% complete = 50% payment, and so forth), less retainage as needed. [The exception is for bond premiums, where we will reimburse the contractor for the amount of the premiums.] In preparation of the estimate of completion or work, preparatory work may be considered -- but this does not call for full reimbursement of contractor's incurred costs for the preparatory work; rather, it merely allows preparatory work to be considered in calculating the estimate of completion of work. The original poster might have an easier time with its contracting officer if it drops its request for reimbursement based on actual incurred costs and instead asks for a normal progress payment for the scaffolding, for example, suggesting that the erection of the scaffolding = 5% of completion.

Joel, Is anyone here advocating routine submission of claims to resolve or force resolution of matters that are not yet otherwise resolvable?

It seems the agency has provided a reasonable explanation for its position. I would recommend that the contractor be polite and persuasive, rather than obstinate and demanding. I don't think the contractor can win the argument by being obstinate or demanding. But if the contractor really feels it is entitled, as a matter of right, to immediate payment for scaffolding costs, it needs to read and follow the instructions of the contract's Disputes clause. If the matter is appealed to a board of contract appeals, it is very possible that the agency will win there because the agency position may be seen as "reasonable" and within the bounds of discretion. Based on what I have read here, I differ with Joel and Carl in that I think the agency's contracting officer may approve the immediate scaffolding payment but I am not convinced that he or she must approve it. For now, polite and persuasive is probably better.

It depends. Depending on the text of the contract and the intention of the parties when the contract was formed and then when the task order was issued, it could be that the task order's first year option must be exercised in its entirety (all of the CLINs) in order for the option exercise to be valid. Or, it could be that the Government may pick and choose from among the task order's first year option CLINs and exercise some or all at its discretion. We don't have the contract or task order, so we cannot answer definitively. If the contractor thinks that all of the option CLINs must be exercised, it may submit a claim saying so under the Disputes clause of the contract.

You don’t need a legal authority or permission. If there is a legal prohibition on going beyond five years, your attorney will tell you (without citing the FAR, as the FAR is inapplicable).

You cannot force the Government agency to accept your unsuccessful bid. However, you can politely inform the contracting officer of your voluntary extension of the period for acceptance of your bid. If the contracting officer knows that your bid is still valid, he or she may make award from the old solicitation rather than starting a new solicitation. Was the contract to the low bidder terminated for default?

Oja, Why do you think a five-year limitation applies no-cost cafeteria contracts? Please do not cite the FAR in your answer, as the FAR does not apply to no-cost contracts. A longer contract period may provide more stability for the operator -- this maybe especially important if the operator is providing opportunities for the blind or severely disabled. p.s. Although nothing in the FAR applies to no-cost contracts, there are some statutes mentioned in the FAR that have reach beyond FAR contracts. CICA has already been mentioned. Your solicitation under 34 CFR 395.33(b) will not be subject to the FAR, since you contemplate a no-cost contract. p.p.s. If we're talking about Randolph-Sheppard, the federal agency doesn't award a contract at all, right? My understanding has been that the agency enters into an agreement with the state licensing agency, and that the SLA then arranges for the work to be accomplished.

Well, Carl, maybe this is a matter of semantics. To me, drawing a line in the sand = unilaterally re-establishing a delivery date: deliver by a certain new date (unilaterally set by the contracting officer) or face termination.

In other words, the contracting officer should unilaterally re-establish a delivery date. Yes, the contracting officer can unilaterally re-establish a delivery date after the delivery date has passed in lieu of terminating for default (or cause, for a contract for commercial items). Doing so is called forbearing, and is allowed under our common law. If the contracting officer wants to unilaterally re-establish a delivery date by letter, I would recommend calling it a cure notice rather than a show cause notice -- if the contractor doesn't cure the deficiency (delivery by the re-established delivery date), the Government may terminate for cause.

It isn’t a change, in these circumstances. It is an administrative action in lieu of termination for default (or cause). We’re outside the FAR and in the realm of common law. If this were a non-commercial contract that included the 52.243-1 clause, that clause would not be cited for a re-establishment or the delivery date in lieu of termination for default (or cause). So, common law and common sense.

Of course you can unilaterally re-establish a delivery date -- it isn't a change and it isn't barred by 52.212-4(c). Let me say that again for emphasis -- it isn't a change. Yes! Please record the fact of the contractor's failure in CPARS.

Right. The Excluded Parties list reaches far beyond (or, in other words, is not limited to) FAR-based contracts.

Ask Verizon or Sprint how large non-Government customers set up their contacts. When there is an estimated quantity, you may obligate to the estimate and then add or deduct money as needed -- you need not obligate to the maximum.

You found a good document, and Retreadfed is also pointing in exactly the right direction. The GAO has made it clear a number of times that the FAR does not apply to no-cost contracts, although CICA does apply to them.

You don’t need an authority. It sounds like you already have a contract with a potential life of 15 years. Let anyone who objects provide the authority that prohibits anything over 5 years. Then, investigate to see if that cited authority actually applies in your case. If not, ignore the input. The FAR does not apply to no-cost contracts, or concessionaire contracts.

I do not understand the question.

Yes, I am a big fan of the notification of changes clause! It is written to avoid constructive changes. I have even used it in some contracts for commercial items under FAR 12.301(e). But, dropping that clause for a moment, when a constructive change seems to be arising in a contract for commercial items, the contractor can (1) assert that no changes are allowed by insisting on fidelity to 52.212-4(c) and not starting the work; (2) insist on a written change as required by 52.212-4(c) before starting the work; or (3) keep quiet, start the work, and make its claim for more money later (after the opportunity for a timely mutually-beneficial negotiation has passed). We seem to be talking about (3), where a Government official erred in making what the contractor saw as a change, and the contractor did not elect (1) or (2). We would be better served if more contractors would choose (1) or (2). But, when (3) is the reality, the Disputes clause is there to facilitate the contractor's remedy (if the facts call for a remedy).

Entirely coincidental...

Re: The 2001 ASBCA case (SAWADI). Good. The ASBCA and I are taking the same stand.

I understand where you’re coming from. But the only way the matter gets to the Boards (or the courts) is through the Disputes clause. This remains a true statement. If a Dispute is raised, the Boards may reasonably look to the Changes clause to help fashion a remedy (although they need not be limited by the Changes clause) — but I cannot allow myself to declare that the Changes clause gives the Government permission to unilaterally order a constructive change and that it gives the contractor a right to equitable adjustment for a constructive change. If I were administering a contract for commercial items and a constructive change occurred, and I later came to terms with the contractor for settlement, my settlement modification would cite the Disputes clause as the authority for the agreement. That’s my practice.

You’re still looking for something in the contract that gives permission for a constructive change. There is none. The Changes clause neither gives permission for a constructive change nor provides a remedy for a constructive change. In a contract for commercial items, the Government cannot make a unilateral change under FAR 52.212-4(c). Neither can the Government order a constructive change nor provide an equitable adjustment for such order under FAR 52.212-4(c). A constructive change, if allowed to occur through sloppy contract administration, is formalized and remedied under the Disputes clause. At least, that’s how I approach it.

Only if you are looking for prior permission to do a constructive change. There is no such permission. The Disputes clause (not the Changes clause) provides perfectly for after-the-fact formalization and remedy for a constructive change. The -4 clause here was likely mis-applied — this service almost certainly does not meet the FAR definition for a commercial item. As you noted, “Seemingly a poor fit...”

You don't need a bilateral agreement for a constructive change to occur -- indeed, by definition, EVERY constructive change happens without a bilateral agreement -- if there was a bilateral agreement under the changes clause, then the change would not be characterized as a constructive change. So FAR 52.212-4(c) is not a bar to or prohibition on constructive changes in contracts for commercial items. Nothing in the contract gives permission for constructive changes. Neither FAR 52.212-4(c) nor the Changes clauses at FAR 52.243-x allow, authorize, or otherwise countenance constructive changes. Constructive changes arise wholly outside the Changes clause. Constructive changes arise under the Disputes clause, not the Changes clause. The Disputes clause is incorporated into FAR 52.212-5 for contracts for commercial items. So, YES, you can have a constructive change under a commercial item contract (if you have sloppy contract administration) and you can use the Disputes clause to formalize that change. This is not giving permission for constructive changes (officially, there should never be any constructive changes), but merely providing for after-the-fact formalization and remedy in lieu of a breach argument.