Heretalearn

In fact, isn't there some exculpating language somewhere in the small business utilization clause that just agrees to use small businesses to the extent it's consistent with effective or efficient performance (or am I thinking of Commercial Items language)? If so, why not just use that? It seems reasonably easy to make a case that if a project is 9/10 complete before the threshold is triggered, it's inconsistent with efficient and effective performance to disrupt existing subcontract arrangements.

All fun responses, but not very practical. I suspect the prime may be trying to require the plan of the sub, because the CO is requiring it of the prime. If that is the case, arming the prime with the valid reasons to excuse a plan, so that it may likewise provide justification to the CO, might settle the issue without argument or animus. If the CO thinks he/she needs a plan, a trick plan with a zero goal will just send ire up the line. Zero is not a goal.

I did seek legal advice, and the Government ultimately settled with us. At issue were (1) the CO did not provide any written or oral notice of funds availability prior to commencement of the new option; (2) per statements made by the CO in writing and orally, it appears that funds were not, in fact, available until 11 days after the option commenced. (I suspect that had our matter not been settled, the definition of "available" may also have become an issue.) I could not find a case which addressed either of our issues directly (but my research resources are limited). Nor could the attorney we used (but the case settled early, I don't think he did much research). The case the Government's outside counsel referred us to was distinguishable (it appeared) on the first issue and took pains (it appeared) not to address the second issue. If that was the best case he could find, I'm not surprised our case settled early. So far as I can tell, none of the cases kindly provided above addresses either issue, though I'm not a lawyer, nor do I have a fraction of the experience or insight you all have, so I might have missed something. COs do need to think ahead. If our CO had provided the notice of funds availability we would not have had an alleged "hook" to extricate ourselves from the contract. I think COs mostly do think ahead, which may be why it's hard to find decisions that are on-point. But if our CO's statements that she didn't have available funds yet was accurate, notifying us that funds were available certainly wasn't the answer. Had we wanted to continue performance it would have been at our risk, and that she insisted that we do so must, by all I have read, have been at her risk - in theory, at great personal risk. (I have to think she genuinely believed that the notice and actually having funding available, however she defined that, were irrelevant because she would not have taken such a great personal risk, so I naturally wonder what she based that belief on, even after our case settled. She SEEMED to think that the Availability of Funds clause is a get-out-of-jail-free card for the Government regarding funding issues.) It seems everyone is between a rock and a hard place, not the least because for all the pronouncements and dire warnings, there's a conspiracy of silence between COs and contractors about working without funding. I know this because we 've been particpating in it for the better part of three years. Before that, it never came up. Stop Orders may be useful where the clause is present and the services aren't vital. But if Congress doesn't get its appropriations act together, sooner or later a sprinkling of COs will be unable to provide funding for work already suffered to be performed at risk, and the regulations will hit the fan, after which it might be easier to find cases.

Now we're just rambling about random option exercise and availability of funds issues.

Leaving aside what constitutes funds being "available" for the moment, the stated conclusion certainly seems logical. But neither we, nor the attorney we retained, nor, apparently, the Government's outside counsel in the dispute discussed above, found an unequivocal precedent. The case cited to us by the Government's counsel stopped short of addressing whether a funding "breach" is curable, stating only that it didn't impact an otherwise properly exercised option. It would be informative if the GAO attorney you spoke to is aware of a case that specifically states that a lapse in "available" funding (however that is determined) terminates a contract.

This was our fact situation precisely. The CO exercised Option X (commencing October 1) subject to Availability of Funds but did not provide notice of availabile funds until October 11 (and in fact told us more than once in the interim that funds were not yet available to her). (Based on the information received in this string we consulted an experienced Government contract attorney.) At 12:01 a.m. on October 1 we notified her of our belief that the contract had therefore lapsed, and later requested and received a COFD, which we appealed. The Government settled with us by allowing a no-cost, no-fault termination. During discussions, the agency's outside counsel referred us to United Food Services, Inc., 93-1 BCA P 25,462 (1992). I wasn't sure the case was relevant here because in that fact situation the CO did provide the notice of available funding prior to commencement of the new option. The appellant seems to be taking issue with, among other things, the validity of the funding. The Board ruled on whether the option was effectively exercised prior to its commencement, declining to decide whether the alleged lapse in funding, if any, breached the contract, but stated: "Events that concern lapses in funding on or after 1 October 1990 have no bearing on (the issue of whether or not the option was exercised effectively prior to 1 October 1990). With respect to the alleged lapses in funding, we decide only that assuming they were breaches, a breach during an option period does not serve to invalidate an otherwise valid exercise of the option." That surprised me. I'd have thought a lapse in funding would serve to lapse the contract. It flummoxes me if we are bound to perform services for which the Government is not bound to pay us. I suspect the Government settled with us on our original terms (we wanted out of the contract) because, as Mr. Edwards pointed out earlier in this string, the notice was a condition precedent to effective exercise of the the option and the CO failed to provide the notice. As they settled with us, the issue's still ambiguous, unless the case they sent us before settlement makes some point too nuanced for me to grasp. I'm sorry - I'm not asking a specific question, which is what this forum's for. I just wanted to share what little light was shed, and the practical resolution that resulted from your collective sagacity. Thank you all.

Do you have the right to approve the subcontract? Why not ask the contractor to flow down the Government's right of refusal?

SBA's mentor-protege program is for 8a participants and their mentors only. DHS has an M-P program. I believe GSA has a pilot M-P program. Probably other agencies have individual programs as well. Most, not all, programs have an accessible database or list of participants, accessible through their websites. There isn't a combined database or list.

While my company's experience may not be representative, we've never had a federal customer while procuring on its own behalf make any sort of reference to or question regarding our discounted GSA MAS prices. Had we become aware of any "hit" to our reputation based on the GSA MAS discount, we'd have explained that the GSA discount is a concession made by the contractor in return for the theoretical reduction in competition (only Schedule holders may propose) and mass sales opportunities offered to the contractor through the program.

As it happens, in the past the CO has not notified us either orally or in writing that funds were available prior to issuance of the funding modification. I don't know what will happen, of course, with regard to the new option. Thank you. Your analysis makes the position clear. We'll consult a federal contract attorney to advise and direct us.

We won't actually discontinue performance. I think we may have to get a COFD and bring the matter before the BCA, and we would continue to perform throughout that process if the CO requires it. I would still like the group's judgement as to the existence of a contract if, after exercising the option subject to the availability of funds, the CO does not, in fact, fund the option by it's start date - and whether, if she funds it retroactively, that somehow reconstitutes a lapsed contract. In my mind, that's a different question than whether the option exercise is proper when issued.

The quote above is from the Topic, "Availability of Funds", which addressed questions regarding a contractor's risk when continuing to perform after an option is exercised but before funds are obligated for the option period. I remember (maybe inaccurately) in a different Topic discussion, a member or members stating that retroactive exercise (exercise, not funding) of a lapsed option isn't possible, on the basis that one can't take a contract action on a lapsed contract. My company is performing a contract from which it would like to extricate itself. The contract contains FARs 52.232-18 Availability of Funds and 52.232-19 Availability of Funds for the Next Fiscal Year. The next option commences October 1. Historically, the CO has exercised each option with a unilateral modification that stated, in part, "In accordance with FAR 52.232-18, this modification is subject to the availability of FY__ funds." In each instance the funds for the option were obligated a week or more after issuance of the modification exercising the option subject to the availability of funds. I have suggested to my company's leadership that regardless of when the option is actually exercised, should the Agency neglect to obligate funding by the option start date, there will then be no contract, we will not be obligated to continue performance, and we will not be bound by the terms of the expired contract. (We would continue to perform while the Agency makes other arrangements in that case, as long as we were't bound by the expired contract.) I have suggested that we should arrange to have a notification, along the lines discussed in Paragraph No. 3 in the quote above, delivered immediate upon expiration of the current option if funding has not been obligated for the next option. A Federal contracting consultant has advised the company leadership that should events and the company proceed as described above, the CO could merely obligate funding after receipt of our notification, retroactive to the commencement of the new option. In his judgement this action would in some way reconstitute the contract. He has further advised that standing our ground in such a case would constitute default and trigger the default and/or liquidated damages consequences. If the CO fails to obligate funds for the next option by its start date, and we consequently notify the CO that the contract has expired and we will stop performance on a date certain - (1) can the the CO subsequently obligate the funds retroactively? (2) If the CO does so and we cease performance in accordance with our notification, will that constitute default? I hesitate to pit my judgement against that of a professional Federal contracting consultant. Maybe he knows something I don't know.

I think the first appearance of the word "of" may be a typo and it's meant to be "or". But are you talking about that kind of mistake? I don't know if it's a mistake or not, but it does seem a little circular to define something as being part of the secondary site of work so long as it is adjacent to the secondary site of work.

I would think there's enough support in the schedule contract language, in which a vendor generally agrees not to give a commercial entitty GSA's price or better. You're a commercial entity. We tried to negotiate our "commercial sales practice format" to except sales to Federal prime contractors as commercial sales, unsuccessfully. I supposed another vendor might be more successful with a different CO but haven't seen an example of that. There's a lot of inconsistency in GSA as to whether and how some regs or contract clauses are enforced even as among COs administering contracts for the same products. Your sub will still have to abide by the commercial sales practice document it agreed to or trigger its Price Reduction Clause in its schedule contract. As to your second question, GSA commercial "sales" for schedule purposes and FAR-defined commercial "items" are two different things.

I have FAR 52.211-11 (Liquidated Damages) in a service contract where we may default. The blank line in paragraph (a) for amount of monetary damages is left blank, as the clause is incorporated by reference only. Is the clause null when not completed? FAR 52.249-08 (Default, Fixed Price) is also incorporated by reference. Is it usual for both clauses to be present?

Once again I'm not entirely sure I understand the question, but I'm going to give this a stab since no one else has yet. I'm sure someone more knowledgeable will correct me if I'm answering incorrectly or answering the wrong question. I'm assuming you're talking about a GSA Multiple Award Schedule. You need to look at your Price Reduction clause and your Commercial Sales Practices Format. As I understand it, you can't give a commercial customer a discount in violation of these, even if the end result benefits the procuring agency. My company tried to negotiate the ability to give our GSA schedule rates to bidders for prime task orders only in instances where we would have provided services to them as a sub under the GSA task order for which they were competing. We attempted to incorporate this as an element of our Commercial Sales Practices Format. The CO found this to be unacceptable on the basis that GSA must receive our best price. Period. Our schedule has one exception, in that the price reduction clause isn't triggered by lower-price commercial orders which exceed our schedule's Maximum Order provision. I hope this helps, even if only to involve one of the members who REALLY knows what he/she's talking about.

Why would the vendor load the the differential into the base rate if it was instructed during the proposal stage that the differential would be issued on a Task Order as a separate rate? Was the instruction in writing? Also, this doesn't appear to be an SCA/FLSA price adjustment for wage increases request. It's difficult to be sure on the facts given, but as a vendor I would consider requesting an adjustment based on either defective specifications during the bid process, or possibly on the contract's change clause. In either of those cases my adjustment proposal would apply G&A and fee to the increase.

I don't know what a "Garrison" environment is, but you might find the Availability of Funding and More Funding Questions threads under the Contract Administration topic helpful.

"Contract law" doesn't generally set prices. Parties to contracts set prices.

I don't know whether it does what it says it does or does it well, but it legitimately exists as: Registration Status: Active in CCR; Registration valid until 01/27/2012. DUNS: 008295457 DUNS PLUS4: CAGE/NCAGE: 631B9 Legal Business Name: FEDERAL VERIFICATION CO., INC. Doing Business As (DBA): GSA APPLICATION SERVICES Division Name: GSAAPPSVCS SOUTH CAROLINA Division Number: 01 Company URL: http://www.gsaapplicationservices.com

I'm not sure that B's sale to A is a sale to an eligible ordering activity (though I could be wrong). I'm assuming we're talking about Multiple Award Schedule sales and pricelists. If B's GSA price is $100 and he sells to A, a commercial entity, for $95, I believe B may trigger the price reduction clause. But it may depend. Some price reduction clauses are triggered by certain cost elements (such as G&A or fee; i.e., a lower commerical G&A or fee rate is the trigger) rather than the fully burdened price rate. If this is a bid for services based on burdened labor hours, possibly a new GSA price has to be submitted to and approved by GSA for each Wage Determination geographical region, and, within certain parameters the GSA price may be customized for this bid. I also think that under certain GSA MAS contracts separate task orders can be awarded to team members, but I'm not sure exactly how that would work.

Does your Subcontract Administrator cite a reason that he believes the clause is necessary in the circumstances?

I'm not sure about the Navy or the Coast Guard, but I think it doesn't apply to the National Guard because the National Guard isn't considered to be either federal or military.

Yes, I see. The CBA is the WD and (putting aside potential "ifs", "ands" and "buts") the WD (and it's"minimum" wages, etc.) in effect at award is incorporated in the first contract year awarded. Subsequent contract years may incorporate CBA/WDs with different wages, etc. I wonder that didn't occur to me. Thanks so much. As to "ifs", "ands" and "buts", we've experienced some conflict where the first contract "year" doesn't last 12 months (often these days because an award is delayed), the CBA increases no longer track against the contract periods, or a combination of those types of factors. The trick is usually to get the CO, DOL Wage & Hour Division and the collective bargaining unit all on the same page.

FAR Subpart 22.10 says, "Successor contractors performing on contracts in excess of $2,500 for substantially the same services performed in the same locality must pay wages and fringe benefits (including accrued wages and benefits and prospective increases) at least equal to those contained in any bona fide collective bargaining agreement entered into under the predecessor contract..." [22.1002-3(a)] The common wisdom in our industry and DOL's website at http://www.dol.gov/esa/whd/regs/compliance/web/SCA_FAQ.htm hold that the equal wages, etc. must be honored at least during, but not longer than, the first year of the the contract. I've never been able to nail down a statute or regulation stipulating the "first year of the contract" stricture. Is anyone able to tell me what law, theory or interpretation gives rise to it?