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About rios0311

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  1. I had not seen the definition for CFA until you pointed it out.Thank you for the correction.
  2. Thanks, Retreadfed. I appreciate your input. I don't suggest that 42.12 does not apply to GSA contracts. GSA contracts are novated all the time. With regard to your reference of 42.302(a)(5), (9), (11) and (12), that's not how I read that section - or the subpart for that matter. It applies to agencies that assign their contracts for administration. We didn't delegate any responsibility to GSA when we cut a task order from a GSA contract. My understanding has always been (admittedly, perhaps erroneously) that once we award a task order, we have a contract, the parties to which are the agency and the vendor only. Unlike an award under SBA's 8(a) program, GSA is not a party to an FSS task order once it is awarded. This understanding leads me to question the ability of a GSA CO to take an action that is binding on another agency, unless the agency agrees to it before hand (maybe we do by using the FSS program, but I've never seen it stated.) I'd like to think that 42.12 provides a solution, but I don't see how that would make sense under the FSS environment. In accordance with 42.1202(b), the CO responsible for processing and executing the novation is the CO with the largest unsettled dollar-balance of contracts. That would have been us, because it is unlikely that A had task orders with other agencies. Even if they did, I believe that our agency would have easily had the largest unsettled dollar balance of contracts. I'm wondering how to interpret that within the context of a GSA FSS novation.
  3. Thank you very much, C Culham. The mission is international in nature and foreign nationals and language matters are at play, which helps explain why the agency does not have the internal capability. The awarding CO didn't require a performance bond (contracts predate my presence at the agency) - but (1), I don't know that I would have thought about using one had I been the awarding CO, and (2), I'm not sufficiently knowledgeable with performance bonds to know what the agency's rights would be in the specific case at hand. I'll look into this to see if it is something we should consider in the future. Thanks for trying to find a legal or policy reference. Your reasoning makes sense and are good points to consider.
  4. C Culham - I agree. I was not concerned with A's and B's concerns. I was concerned with B's inability to perform because it was missing about 150 employees that A did not transfer at the time of novation. At the time, B did not know who these employees were or how to reach them because A was refusing to furnish that information. Had we modified the orders and put them in B's name, how do you suppose B could perform? Termination was not an option for us under these specific circumstances. I wrote in the background section that the contractor-employees perform the core mission. The agency does not have the capability to perform its mission without them. What is the basis for your statement "Your obligation is to follow agreement"? It would be helpful for me to know where agency responsibilities with respect to FSS novations are specified. Is it in GSA policy? OMB memo? The FAR? Retreadfed - The background I gave provided all the facts. In it, I wrote that the GSA CO did not comply with 42.12 because the assets had not been transferred at the time of the novation. Nor did the CO reach out to us for our opinion on the novation. Had the CO asked, we would not have objected, so long as A had furnished to B all the employee information that B required to perform. The services are very specialized, so without A's employees, B could not perform. Correct, the resolution of the issues between A and B was not my problem and I stated that in the back ground section I provided. I wrote this "My position is that this is not our problem" and this "I believe that it is not our problem" with regard to A's and B's issues. My concern and responsibility was to ensure that the mission wasn't disrupted. Same question for you - what is the basis for your statement: "...you had no authority to disregard the actions taken by the responsible contracting officer who was acting on behalf of the executive branch when executing the novation agreement." It would be helpful for me to know where agency responsibilities with respect to FSS novations are specified. Is it in GSA policy? OMB memo? The FAR? Are you suggesting that the actions of GSA's contracting officers trump the procurement authority delegated to agency contracting officers and their responsibility for ensuring that government interests are protected in their agencies' contractual relationships?
  5. Update: A has complied and furnished the required information to B. My question still stands: under such a scenario, which is extremely unusual, would it have been incorrect for our agency to continue performance with A while A and B sorted out their legal matters between themselves and until B was able to perform. Termination of A's task order was not an option for us without having another contractor in place with employees on the ready, otherwise, the mission would grind to a halt.
  6. No, No one is taking sides. We only need assurance that B is ready to perform before we can modify the vendor payment information on the To. A’s payroll is huge, so if we process the modification and B does not have the employee information loaded into their payroll processing system, neither A nor B will be able to pay the contractor employees. We will issue the modification once that takes place. That should have been done when they submitted the novation documents to GSA. Because it wasn’t, GSA stepped in to compel the parties to honor the novation. But you are correct, if GSA terminates the contract, then we are in no better position. We’ve been thinking about that too. Today we reached out to A to explain that we are waiting on their compliance with the terms of the novation to issue the acknowledgement modification. My sense is that A will come around and will furnish the required information to B. We’ll see. I do not disagree with your point of view about A’s intentions. You may be spot on.
  7. Thank you ji20874. We have notified GSA. GSA has issued A and B notices to comply with the terms of the novation under threat of termination. We will immediately honor the novation once the parties comply with the novation - namely, that B has the employees to perform. To date, it does not because A has not furnished the employee information. You are correct, I think A entered into the agreement in bad faith, but I don't believe it is our place to pursue debarment, since it was the GSA CO who executed the novation. Here is a sanitized version of the notice the A and B received: As you are aware, A and B entered into a novation agreement with GSA (signed on [date]). It has come to my attention through a customer agency that the Transferee (B) has not received information from the Transferor (A) necessary to perform task order [number] and [number] under contract [FSS number]. The transfer of all assets and information necessary to perform the contract was required under the terms of the novation agreement. If this has not occurred, then A and B are both in breach of the novation agreement and B may be at risk of cancellation of the contract and any task orders thereunder. We note also that B and A both guaranteed performance of the contract and both parties are liable for a breach.
  8. Thank you for taking the time to read the long background. Yes, that specific language is included in the novation. The novation also includes this language immediately after the language you referenced: 2. As of [date] Transferor has transferred to Transferee the entire portion of Transferor's Assets involved in performing the Contracts by virtue of the Asset Purchase Agreement entered into between Transferor and Transferee on [date] (the "Assets"). 3. Transferee has acquired all of the Assets of Transferor by virtue of the above transfer. 4. Transferee has assumed all obligations and liabilities of Transferor under the Contracts by virtue of the above transfer. 5. Transferee is in a position to fully perform all obligations that may exist under the Contracts. 6. It is consistent with the Government's interest to recognize Transferee as the successor party to the Contracts. 7. Evidence of the above transfer has been provided to the Government. 1, 3, 5, and 7 could not have possibly taken place. Otherwise, B would have the employees and would be in a position to perform. B does not have the employees and cannot perform without employees. A has not furnished the employee information. Further, A has told GSA that it will comply with the novation, but only after we make a determination that novation is in our best interest. My position is that we only make that determination at the time we modify the task orders. We can't modify the orders until B is capable of performing. Our legal team is asking that we make a separate determination and direct A to furnish the information to B. I believe that it is not our problem, and I need not make that determination until B is ready to perform.
  9. We have a very interesting situation that has me at odds with my legal counsel. Question: Is an agency required to acknowledge an FSS contract novation by modifying its task orders to replace the transferor's name and payment information with the transferee's information, or is it legally permissible for an agency to continue performance of its FSS orders if the contractor is willing and able (and requesting) to continue to perform the orders, despite the contractor's schedule contract having been novated by GSA? Background: We have a number of task orders (very soon expiring) under a schedule contract with contractor A, and we have a stand-alone contract with contractor B for the same type of services, but for a different organization within our agency. Due to some legal disputes between contractors A and B, contractor A agrees, as a settlement, to transfer its assets to contractor B (mainly the employees). The asset sale agreement includes a no-compete clause, which prevents contractor A from performing any type of work similar to the work covered by the schedule it is novating. The two contractors submit the required novation request and documents to GSA, certify that the assets have been transferred, and then the two proceed to sign the novation with GSA. The schedule is now in the name of contractor B. GSA notifies us of the novation and forwards the documents to us. The novation agreement states that it covers all task orders previously awarded under Contractor A's schedule. However, Contractor A immediately informs us that it does not want the task orders novated and wishes to perform them until completion. At the same time, Contractor B informs us of the novation and requests that we immediately acknowledge the novation by modifying the task orders. At this point, ordinarily, we would modify the task order(s) to change the vendor name and SAM information to reflect the new vendor's (transferee) information. However, we won't do that until we're assured that Contractor B has Contractor A's employees (over 100 performing our core mission) in its payroll system to ensure that they don't miss a payroll, possibly disrupting our mission. So we continue to perform with Contractor A until A transfers the employee information to B and B shows us that they are ready to perform by having the employees in their payroll system. However, Contractor A becomes uncooperative with contractor b and refuses to transfer its assets (employee information) to contractor B. Contractor B then demands that we (the agency) direct contractor A to furnish the information B requires to make job offers to A's employees. My position is that this is not our problem. That this is for B and A to figure out. It would appear to me that A is in breach of its agreement with B and perhaps GSA failed in its duty to ensure that B has the assets to perform prior to novating. In the meantime, A continues to perform, while B's attorneys begin to bombard our attorneys with threats of litigation. Of course, I feel that these should be directed to contractor A, not to us. My COs and even the GSA CO feel that we have the discretion to acknowledge or not to acknowledge the novation because A wishes to continue performing and is fully capable of doing so. I see our task orders as contracts between two parties, and don't believe that GSA's CO has the power or authority to take an action that is binding on another agency, unless - unbeknownst to me - agencies agree to this by using schedule contracts, but where is this written? New situation for our attorneys, so they reach out to GSA legal. GSA attorneys assert that the GSA CO's novation automatically applied to all our task orders and we have no discretion or say in the matter. Our attorneys agree with and side with GSA. In fact, a friend who is a procurement attorney at a large agency agrees as well - although when I asked her I did not provide all the details. GSA says we have no option or discretion in the matter. That our only options are to acknowledge the novation or terminate the task orders. Termination is not an option for us. I can't acknowledge the novation until B has the employees - to date, it doesn't and our orders are quickly approaching expiration. Our attorneys tell us that we can ride out the orders with A, but we can't modify them or extend them under the existing (remaining) extension terms; i.e., options or continuity of services clause. My preference is to ride out the orders with A and extend its task orders under the TOs' remaining extension terms, provided that A is willing to continue to perform (they are and continue to express this to us) With respect to performing an order under A's name while the schedule is under B's name, I don't see the relevance to this. The schedule's terms and conditions flowed down to the task order and were incorporated by reference at the time of award. In my opinion, it should not matter that the schedule is now under someone else's name. Granted, any out of scope work on the task order would fall outside the FSS environment and should be supported by the appropriate justification. GSA has reached out to both contractors and informed them that if they don't comply with the novation, they would be in breech, and that GSA would nullify or cancel the novation if they didn't straighten out the matter. Contractor A's attorney responded to GSA with the following (excerpt from A's attorney's letter to GSA's CO): "As you know, task orders are effectively stand-alone contracts even when they are issued under a government-wide schedule contract. Thus, a task order will survive the termination or expiration of its schedule contract... You made your determination under FAR Subpart 42.12 on [date] that the novation of GSA contract XXXX was in the best interest of the government. To our knowledge, [our agency] has not made a corresponding determination with respect to task orders TOXXXX and TOXXXXX...In a novation, the government has sole discretion to determine what is and is not in its best interest." Repeat of Question: Are we required to acknowledge the novation by modifying our task orders with A to replace the vendor name and payment information with B's information, or is it legally permissible for us to continue performance of the FSS orders if A is willing and able (and requesting) to continue to perform, despite A's schedule contract having been novated? I believe that under this scenario, we can disregard GSA's novation of the schedule because here, the contractor A wishes to continue to perform its orders and I believe that doing so is in our best interest. Our attorneys tell me we can't but can't provide a legal reference, citation or case to support their position. They simply state I'd be violating law. Which law? Who knows. Thoughts?
  10. It has been several months since my last post on this topic, so I thought I’d check in with a couple of updates. I saw a Wifcon post that was made several years ago where someone asks about a “true” personal services contract and references payroll processing. I believe that the question caused some surprise. However, it was not entirely off. Note that the FAR payments clause for personal services contracts indicates that the contractor can get paid by submission of invoices or time cards. In addition, the FAR termination clause for personal services contracts requires a 15 day notice period. This is the same as many private industry employment contracts. OMB Circular A-11, MAX Schedule O - Object Classification (object class 11.3) includes a note that advises to classify the salaries of individual personal services contractors, which OPM classifies as Federal employees, under that object class and further clarifies that payments under contacts with a company for the personal services of its employees should be classified under the object class appropriate for whatever you are buying. Further, Chapter 7 of the GAO Red Book (recording obligations) includes a section on the recording statute. See the discussion on 31 USC 1501(a)(7) where it discusses recording salary obligations. It explains that the guidance is not limited to the recording of federal employee salaries. It states that the guidance also applies to the recording of the salaries of persons serving under personal services contracts. It explains that salaries become recordable obligations only after services are performed. The discussion clearly suggests that it would be inappropriate to record an obligation related to salaries at the time of award prior to rendering the services. Individual PSCs meet the legal definition of an employee under several statutes, are eligible for coverage under FECA, and are subject to the classification Act and conflict of interest rules. We are also required to provide them with health benefits that meet the requirements of the ACA. For these and several other reasons, we have decided to treat them as (non Title 5) employees, except for purposes of laws administered by OPM, and will provide them with payroll processing services, benefits and other services. We will be issuing their W-2s under our FETID. Unfortunately, none of the shared services providers of payroll processing services has been willing to take us on as a client, each for its own reasons, so we are left to look towards industry to support this effort. It has been interesting learning about all the requirements to procure a full services human capital management application for our PSCs and conducting procurements for health benefits consultants to help us create an agency sponsored benefits program. And did I mention, thank you FedRAMP for stymying my first procurement for a cloud based HCM application? Shame on me for not knowing better. Lesson learned. Never again. Other requirements included writing a new agency policy on PSCs, drafting the PSC agreements, which are basically employment agreements that have little in common with a FAR based contract and are unlikely to include POP end dates - DC is “at will” and the FAR clause provides for easy termination with 15 days notice. We specify “except for termination for cause”, which requires no notice. So why bother with an end date? A note on the references to 5 USC 3109 in FAR 37.104 It is only provided as an example of an authority for personal services. All employees of an agency provide personal services. That authority is generally for appointing temporary experts and consultants into the civil service. It is not available to a CO to hire or appoint an individual. Only an appointing official can use that authority to appoint someone into the civil service. A CO may use the authority to obtain experts and consultants through a contract with a firm that provides those services. I believe that the FAR council could have done a better job of writing this section of the FAR. In my opinion, there is a reason why the FAR section on personal services is so short. It’s purpose is to advise you away from acquiring personal services unless you have statutory authority to hire employees by contract (personal services = employees). And when you do have that authority, the FAR advises to seek advice from your civilian personnel office. Why? It is essentially a hiring authority to hire non-appointed employees. Again, my opinion, my interpretation. I believe that the regular FAR based procurement procedures only apply when procuring personal services from a company. For individual PSCs, only use the FAR regulations if your circumstances require it. But hiring an employee using the federal procurement process makes little sense to me. An interesting issue I’ve run into is with the GSA City Pair Program (CPP) contract. It includes a note stating that contractors may not travel under the CPP. But the contract also states that employees of executive branch agencies are required to travel under the CPP. However, if you ask GSA travel policy personnel, they will tell you that even PSCs may not travel under the CPP, which makes little sense if, as an employee, an agency sends them on official travel. GSA, as with many others, understandably do not distinguish between a contractor-employee and a personal services contractor that is an employee of the agency. Each agency with PSC authority must determine for itself how it will handle PSC travel. And lastly, it has been extremely interesting to see how the different agencies from which we’ve sourced information have implemented their PSC programs so differently. Some are run out of their contacts office, while others are run out of their HR office. Is a CO’s signature really needed if there isn’t a recordable obligation at the time of award? Think about it. The obligation is recorded by the finance or budget office when it obligates salaries. Unfortunately, all this information isn’t neatly packaged together in a single convenient location. So for anyone venturing into this territory for the first time, hopefully this will provide food for thought and perhaps some ideas.
  11. Vern, this is extremely helpful. I really appreciate it. Very interesting to see what the 2019 NDAA holds in terms of PSCs, as it was the 2017 NDAA that expanded our PSC authority... and how ironic that it was the assistant GC for the United States Information Agency that published the article making the distinction between the two types of PSCs (I can clarify that later).
  12. Thank you very much. We plan to award a contract for personal services to an organization. We specify that the government will directly supervise and control the contractor’s employees. It will be for approximately 600 to 800 contractor personnel. The contractor’s main (and probably only) role will be to manage payroll, benefits, and withholding, etc. I planned on including CLINS for hourly labor and premium pay rates, and possibly a line for ODCs for the rare occurrence where we may need the contractor to perform recruiting services. So it sounds like we should not use the PSC payment clause. So using the same reasoning, would the same apply to the use of the PSC termination clause?
  13. I'm looking for some assistance from anyone who has awarded a personal services contract, or from anyone knowledgeable in that area. I have two questions: 1. Can a contract have more than one payments clause? 2. Can a personal services contract that is based on hourly rates also be a Time-and-Materials or Labor Hour contract? I have been writing my agency's (and my) first personal services contract. Due to the size of our contracts organization and the number of contractor personnel we require, we are acquiring our personal services through a third party contractor versus contracting directly with hundreds of independent contractors. I have been writing the contract as is if it will be a Time-and-Materials contract because labor will be billed by the hour and due to the possibility that we may require some ancillary services, such as recruiting services. The draft contract specifies a requirement for fully burdened labor rates and discusses ceiling prices. However, I just realized that the FAR has a payments clause specific to personal services contracts - FAR 52.232-3 Payments Under Personal Services Contracts. Do I use this clause in conjunction with the Payments clause for time-and-materials contracts? Or do I only use the payments clause for personal services contract, because, contrary to what I thought, I am not awarding a time-and-materials contract? I'm ready to inform our working group that we are not awarding a time-and-materials contract, but I'd like to confirm whether my understanding is correct. Unfortunately, for agencies that have personal service contract authority, there isn't much guidance on the topic. Like the fact some agencies consider personal services contractors to be equivalent to direct hire government employee for certain purposes, such as for travel under E2 and for defense by DOJ under Federal Tort Claims Act.
  14. There is a debate in my office regarding whether acceptance of services occurs as the contractor performs the services or after the Government has taken some additional action, such as inspecting the services and executing a receiving report. Some individuals believe that because someone allowed (by inaction) a contractor show up to perform the work required by the contract on a daily basis (ongoing support service), that we’ve automatically accepted those services at the end of the day. The underlying issue that created this argument is whether one of our customers without authority, and through no action of their own, accepted a contractor's services while there was a lapse in funding on the contract on an incrementally funded contract. Our (civilian) agency receives different types of services. Some services occur offsite, where we do not see the services as they are performed, and some occur onsite (e.g., acquisition support services), where contractor employees work side-by-side with government personnel. The onsite contractor employees usually show up for work, much like feds do, and perform the work required by the contract. On occasion we run into the situation where additional funds were not added quickly enough to an incrementally funded contract and the contractor continued to work at risk. The question then becomes whether someone accepted those services and whether an unauthorized commitment has occurred. I don't believe that there is an unauthorized commitment, but the issue here is whether the services were accepted. FAR 46.5 discusses acceptance of supplies and services. This part states that acceptance may take place before delivery, at the time of delivery, or after delivery. If performance is given the same treatment as delivery, with the exception of acceptance before performance, I think that this statement applies equally to performance; i.e., acceptance may take place at the time of performance or after performance. The part states further that Acceptance shall ordinarily be evidenced by execution of an acceptance certificate on an inspection or receiving report form or commercial shipping document/packing list, which seems to imply that in order to denote acceptance, the Government must take some administrative action, such as executing a receiving report. Lastly, the part states that Supplies or services shall ordinarily not be accepted before completion of Government contract quality assurance actions, which seems to imply that a service cannot be accepted and should not be considered accepted until the Government performs some type of inspection process. I’d like to know at what point after a contractor has performed its services are the services considered accepted by the agency. Are services considered accepted only after a service has been inspected and accepted by executing a receiving report or through one of the other means specified in 46.5? Or does the fact that the contractor showed up for work and performed a task in accordance with the contract constitute acceptance at the end of the day? Regarding receiving reports, we provide them only to our payment center to authorize payment of services invoiced by contractors. We do not provide the receiving report to contractors. This isn’t a matter of policy, but simply a matter of practice that no one on either side has questioned. Must the receiving report be provided to the contractor? If not, how does the contractor know we accepted the service? I do not have access to chapter 9 of Administration of Government Contracts (Inspection, Acceptance and Warranties)
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