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Posts posted by ji20874

  1. Okay, my last word--

    I have never said that a contract modification SF-30 is needed to effect a contract closeout. 

    But if a modification is used, it certainly can be unilateral (provided that it is simply a closeout modification to deobligate remaining or excess funds).

    Some 1102s were raised to think that closeout must be done by bilateral modification, but this belief is not required by the FAR.  FAR 4.804 never requires a modification for closeout, much less a bilateral modification -- and it also never requires a release of claims for any contract as part of the closeout process.  Organizations that require these things are trying to avoid all risk, rather than reasonably managing risk.

    A contractor can close out a contract and move it to inactive status in its own books without the Government's permission -- if the Government later presses an action on the contractor, the contractor might have to return it to active status.  Similarly, the Government can close out a contract and move it to inactive status in its own books without the contractor's permission -- if the contractor later presses an action on the Government, the Government might have to return it to active status.

    But here is the best answer -- read FAR 4.804 and do what FAR 4.804 says.  By its own words, FAR 4.804 speaks to “administratively” closing out contracts, and the entirety of FAR Subpart 4 is “Administrative Matters.”  If you have to deobligate excess funds, maybe your agency will do the deobligation without a SF-30 contract modification -- some agencies do.  If you have to do a modification to satisfy your automated systems or your agency policy, well, remember that closeout is an administrative action on the Government’s part — the contractor is wholly uninvolved, and none of the contractor’s rights or obligations are affected by the Government’s administrative closeout of the contract.  Thus, a unilateral modification may be done (unless your agency policy dictates otherwise).  However, if you want to change the contractor's rights or obligations, then a bilateral contract modification would be more appropriate.

  2. All contracted items were not delivered?  That’s a termination matter.  Or maybe it’s a de-scoping matter.  Regardless, it is not a closeout matter.  Disposition of government property and clearing the final patent report is part of the contract administration process.  Closeout occurs after all required contract administration actions have been fully and satisfactorily accomplished.

    Imagine a contract was for 1 EA commercial item at $15K FFP, and the contractor delivered and invoiced for $14K.  And we paid $14K.  What’s the problem?  The contractor has six years to invoice for the additional amount if the contractor wants it.  If four years have passed, the Government might figure that the contractor is unlikely to file an invoice and may administratively close out the contract and deobligate the $1K remaining amount (the contractor probably closed out the contract on its books a long time ago).

    If one wants to avoid all risk, he or she may seek a release of claims from every contractor on every contract, even though the FAR never requires a release of claims for closeout.  And he or she could also insist on doing any needed deobligaton as a bilateral modification.  But it is unreasonable to try to avoid all risk.  Instead, we’re supposed to manage risk.  In the case above of the $15K contract where the contractor delivered and invoiced for $14K four years ago, and there had been no action on the contract since then and everyone is happy, there is a risk that the contractor will invoice for the remaining $1K — but the risk is very small, and it is eminently reasonable and entirely amenable to FAR 4.804 to close out that contract and administratively (unilaterally) deobligate the $1K.

  3. Carl,

    Closeout is not a change.  I do not think of closeout as a change.  Closeout is an administrative action on the Government’s part — the contractor is wholly uninvolved, and none of the contractor’s rights or obligations are affected by the Government’s administrative closeout of the contract.  The Government does not need a contract clause to allow it to move a contract from active to inactive status.

    A unilateral deobligation of funds at closeout does not change the contract price and does not impair the contractor’s right to later submit an invoice.

  4. 22 hours ago, C Culham said:

    I have not missed a thing.  While I understand your position, it is an opinion that is without reference.  Take your quoted statement above.   I hope you do not mean anytime! T4C, T4Cause sure as such right is in the contract but "close out"?  Where in a CI contract does it state you have that unilateral right?

    I think your understanding of closeout differs from mine.  To me, and amenable to FAR 4.804, closeout is an administrative action on the Government’s part — the contractor is wholly uninvolved, and none of the contractor’s rights or obligations are affected by the Government’s administrative closeout of the contract.

    There is no clause anywhere that allows for closeout, either unilaterally or bilaterally, for CI contracts or any other type of contract.  And yet, both the Government and her thousands of contractors administratively close out contracts every day of the year.  Closeout only means that the party doing the closeout takes the contract out of active status and moves it to inactive status.  One party does not need the other party’s permission to closeout.  One party’s decision to closeout has no bearing on the other party.

    22 hours ago, C Culham said:

    From another view when you awarded me a contract you stated a sum certain in some way (FFP, ceiling) and now you believe it's your unilateral right to take that money away for other than a T4C or cause, again explain per the contract how?

    Who said anything about taking away money?  Remember, I have repeatedly said (and you have repeatedly not noticed) that none of the contractor’s rights or obligations are affected by the Government’s administrative closeout of the contract.  If a contract had a single CLIN for $15K, and four years ago the contractor delivered and invoiced for $14K, and the Government paid the invoice amount, that contract has long been ready for closeout. In closeout, we unilaterally deobligate the uninvoiced amount of $1K.

    We have not changed the contract price.  The contract price remains $15K.  The invoiced and paid amount is $14K.  The remaining uninvoiced amount is $1K, and this amount is deobligated in closeout because there is little likelihood the contractor will invoice for it.  We move the contract from active status to inactive status.  The contractor probably closed out the contract in its files a few years ago.

    If the contractor later submits an invoice for the uninvoiced amount, and provided there was no release of claims and the six-year period for a claim has not ended, the Government simply pulls the contract out of closeout, obligates the needed amount, and pays the new invoice.  There is a risk that this might happen, and the Government probably shouldn’t closeout a contract where there is a high likelihood of a future invoice — but we may still close out the contract with that risk — it’s risk management rather than risk avoidance.

    That is how closeout works.  Any notion (or agency practice) that the Government may close out a contract only with the contractor’s permission is error.  Surely, our thousands of contractors don’t seek our permission before they move contracts from active status to inactive status in their files.

    The Government closes out a contract when it reasonably thinks there will be no further action under the contract — if there is any need for T4C or any other action under the contract, then it is not ready for closeout.  Closeout is an administrative action on the Government’s part — the contractor is wholly uninvolved, and none of the contractor’s rights or obligations are affected by the Government’s administrative closeout of the contract.


  5. Carl,

    You might have missed my statement, which I stated twice:  “Remember that closeout is an administrative action on the Government’s part — the contractor is wholly uninvolved, and none of the contractor’s rights or obligations are affected by the Government’s administrative closeout of the contract.”

    A Government decision to close out a contract is an internal administrative decision of the Government — it does not alter the rights or obligations of either party to the contract.  

  6. On 3/23/2019 at 2:29 AM, nkd9 said:

    1. FFP Commercial Service under SAT where a contractor has submitted final invoice and there's a nominal amount left? If by the language of 52.212-4 price is a term, wouldn't the deob have to be bilateral?

    No.  If the contractor completed the work and the Government made payment four years ago on the contractor’s final invoice, and now it is time for closeout, the closeout deobligation is unilateral.  The price hasn’t changed, it’s just that the contractor didn’t invoice the full amount (it isn’t required to) and essentially gave its customer (the Government) a discount — isn’t that nice?  Deobligate the remaining funds and close out the contract.  Remember that closeout is an administrative action on the Government’s part — the contractor is wholly uninvolved, and none of the contractor’s rights or obligations are affected by the Government’s administrative closeout of the contract.

    On 3/23/2019 at 2:29 AM, nkd9 said:

    2.  Again FFP Commercial. The government was unable to use all of the services on a line item, due to weather or other circumstances, leaving a partially funded line item that is no longer needed with an expired POP. Wouldn't the deob  have to be bilateral here too?

    I don’t understand what is meant in this scenario, and need more information.  Did the contractor fail to perform because of the weather?  Were the quantities estimates?  Maybe this is a termination for convenience or cause situation, and not a closeout situation?  We do closeout after we have handled everything else.  Remember that closeout is an administrative action on the Government’s part — the contractor is wholly uninvolved, and none of the contractor’s rights or obligations are affected by the Government’s administrative closeout of the contract.

  7. 1.  In addition to those you listed, a release of claims is required for cost-reimbursement contracts.  All of these releases are required before final payment, and are not part of the closeout process.  The FAR does not require a release of claims for closeout for any contract.

    2.  A closeout deobligation is an administrative action, so you may check block 13.B. of the SF-30.

    A closeout deobligation IS NOT a reduction in price, and IS NOT a change in terms.  A closeout deobligation should be a unilateral administrative modification.  Note:  Some agencies will process closeout deobligations without requiring a SF-30, especially for low-dollar deobligations.

  8. Brand name for an item in a larger construction acquisition?

    You don’t need one.

    You might need a BNJ (not a JEFO, definitely not a J&A) under FAR 16.505(a) as mentioned above for a non-construction order under an IDIQ contract, as the general explained very well above.  But for a construction contract, the clause at 52.236-5, Material and Workmanship, controls.  Because of that clause, you don’t need a BNJ, because and brand name specification is treated as a standard of quality for the component of the larger construction project.

  9. If your higher-ups think a minimum guarantee under an IDIQ contract is a minimum guaranteed payment to the contractor, their professional rot might be too severe to be open to professional rebuttal.  But if you want to try, look at FAR 16.504(a)(1).  

    I am okay with contracting professionals not knowing everything at any moment in time — that’s why professional dialogue is so important, and we all can be susceptible to learning.

    But this is the wrong argument.  If the contractor has failed to perform on a task order and a default termination is in order, do it!  Let the claim process handle any claim that comes.  That’s a battle for another day.  To delay the default termination while your higher-ups wring their hands about an impossible claim based on their own misunderstanding of correct principles is professional rot and mispractice (maybe even malpractice).  You can terminate both the order and the contract for the contractor’s default (or for cause, if this is a commercial item contract).

    Do you have an attorney with some common sense and understanding of correct basic principles who can confirm for your higher-ups that the minimum guarantee is a minimum order guarantee and not a minimum payment guarantee?  Can he or she confirm that there is no such thing as a minimum payment guarantee, and that payments are made only as authorized by the contract’s Payments clause?  I hope the answer to both questions is YES.

    The case law your higher-ups might be thinking about is a situation where the Government fails to order the minimum, which is not your situation.  Even so, that case law is mixed — some decisions say the Government must pay the minimum after failing to order the minimum, and some decisions say the Government only pays demonstrated actual damages up to the minimum.  But this is not your situation, because you ordered the minimum already.

    All this said, you have to exist in your environment.  If your higher-ups are not susceptible to learning, you have to do whatever you can within their permission.  Best wishes.

  10. Retreadfed asked a good question.  If it is a cost-reimbursement contract that you terminate for default, you will pay allowable incurred costs according to the appropriate Payments clause — not because of a claim and not because of any minimum guarantee, but because that’s how a cost-reimbursement contract works according to the appropriate Payments clause.

  11. Joel is right.  You’re still thinking of the minimum guarantee as a payment guarantee.  It isn’t.  It is a minimum order guarantee, and you said you already issued an order that covers the minimum.

    So, don’t argue the wrong argument. 

    The contractor’s only entitlement to payment is under the appropriate Payments clause in the contract.  The contractor only gets paid if it meets the conditions of that clause.

    The discussions you are having in your office display the sickness and unprofessional rot that exist among so many contacting personnel and their pitiful attorneys across the federal government.  It is sad.  I am glad you are able to see.  Coming to WIFCON can help as part of the cure to our cultural sickness and professional rot.  We need far more sunshine and open discussion.

    If you are delaying your default termination action because of this discussion, well, as I said, professional rot.

  12. The minimum guarantee is for the Government to order -- that has already happened.  If the contractor fails to perform, the Government may terminate both the order and the contract for the contractor's default (or for cause, if a commercial item contract).

    Forget trying to search for cases.  If the contractor deserves a default termination, do it.  Just do it.  If a claim comes later, deal with it later.

    Do it.

    It's not a minimum payment -- it is a minimum order.  You err if you think of the minimum guarantee as a minimum payment.

    We only pay contractors for work in accordance with whichever FAR 52.232-x payments clause is included in the contract.

  13. I don’t have any samples.  But read what the FAR says about responsibility, and use some of those words.  Don’t ask SBA to determine whether the offeror is responsible, but make your own definite and direct statement that you have determined the offeror to be non-responsible for this procurement.  Include facts, minimize emotions.  You are not recommending that SBA find the offeror non-responsible; rather, you are making that determination.  Describe the risk or harm the government would face with award to the offeror and express why that risk or harm is unacceptable.  Write the determination using the first person “I” pronoun — not the government determines the offeror non-responsible, but “I” determine it non-responsible.  

    You may share your draft by notification to me within WIFCON.

    Still, there is no guarantee.  In CPARS, did you really give an UNACCEPTABLE rating? Or did you give a SATISFACTORY and mention the poor performance in the text?

  14. Having chosen an LPTA approach, you cannot stop the SBA from doing it’s job if you don’t select a small business solely for a responsibility matter (such as pass/fail past performance). However, instead of writing a wimpy determination of non-responsibility, you can be strong.   I have made more than two dozen determinations of nonresponsibility and COC referrals, and have never had the SBA grant a COC.   Keep emotions out of your determination, but be strong with facts and your own professional decision that the offeror is non-responsible.

    Or, drop the LPTA approach because it does not fit your needs.

  15. BYW, your attorney is wrong.  If you are evaluating past performance as pass/fail (you shouldn’t, but you are), you need to be honest and assign the fail or unacceptable rating, if you think that is right.  You should do what is right, and then let the SBA issue the COC, or not, as it chooses.  It would be a gross failure of your professionalism to assign a pass rating solely because you think the SBA might issue a COC otherwise.

  16. If you evaluate past performance as pass/fail, and you assign a fail rating to a offeror who would otherwise be the successful offeror, you must refer the offeror to the SBA for a COC if that offeror is a small business because you have treated past performance as a responsibility matter.  If the SBA gives a COC, well, you asked for it.

    So don’t evaluate past performance as pass/fail — stop it!  Instead, deal with past performance as part of a tradeoff, and assign the offeror a low confidence (or high risk) rating for past performance — low confidence is not the same as unacceptable.  The low confidence rating does not disqualify the offeror, but it will likely be a disadvantage in the tradeoff.  In the tradeoff, select the best value offeror, even if you have to pay a price premium to another offeror for higher confidence.  In this approach, the unsuccessful small business offeror is not referred to the SBA for s COC.

    Don’t use LPTA if LPTA will not give you the best value.  Use s tradeoff.  Problem solved.  

    You’re welcome.

  17. 1a) No, a technical evaluation is not required for all acquisitions.  A technical evaluation is only required when there are technical evaluation factors (whether formal or informal factors) and some sort of a technical proposal or submission.  Many acquisitions don't have technical evaluation factors and don't need technical evaluations -- for example, a $125 Million sealed bid construction acquisition based only on price and price-related factors with no technical proposal -- for another example, a $90 Thousand simplified acquisition for a national stock numbered item based on a tradeoff between price and delivery with no technical proposal.

    1b) If a technical evaluation is done, it seems that it should be documented.  It is easiest for the documentation to be done by the person (or persons) who did the evaluation.  However, it would be possible for the evaluator (or evaluators) to orally brief the results to the selecting official -- in such a case, the selecting official's documentation should demonstrate a reasonable basis for his or her decision.

    2) No.  It is generally okay for the technical evaluator (or evaluators) to be aware of price.

    3) Sometimes, maybe, I'm just supposing but I don't know for sure, the technical evaluator (or evaluators) might want to select the winner (instead of simply doing the technical evaluation and leaving the tradeoff and selection to the selecting official) -- in such a case, if it ever arose, I might withhold the price from the technical evaluator (or evaluators).

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