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rios0311

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Everything posted by rios0311

  1. Yes, I think it is a great idea to report back on What Happened after applying (or rejecting) the information learned on the threads we create. I would suggest to anyone doing so to include a link to the original discussion topic, and to include a link on the original thread to the What Happened resolution. Thanks for the forum, bob7947. It's been a great learning tool and sounding board throughout the years.
  2. For anyone that followed this thread last year, I thought I'd provide an update on how it ended. After issuing the termination notice and claim for reprocurement costs, the contractor challenged the termination at the Civilian Board of Contract Appeals. For context, the primary reason for terminating the contract for cause was because the contractor failed to deliver a working system within the 30-day extension the CO provided after having re-established the delivery schedule. The issue of re-establishing the delivery schedule was discussed separately on this Wifcon thread: Unfortunately, despite spending countless hours researching court/board decisions, legal blogs and other references, and drafting a series of notices to ensure our termination was procedurally solid, our attorneys did not believe they would prevail in court. They recommended we settle with the contractor. Part of the draft settlement agreement required the contractor to return a small portion of the amount we paid. Unfortunately, the contractor also demanded a satisfactory past performance rating in CPARS. Ultimately, we decided to walk away from the partial refund and instead converted the termination into a termination for convenience and gave the contractor a past performance rating that accurately reflected their performance. From the date of termination, settlement discussions, to the Reviewing Official finalizing the evaluation in CPARS, the entire process took a year. There were some significant lessons learned from the contracting process on this procurement that got us to the point of having to terminate the contract. But there were also some lessons learned about the termination process itself. Among them: 1. Ensure that your attorneys and leadership are onboard and ready to support a termination for cause or default before embarking on that path. 2. Maintaining a strong working relationship with your attorneys will make it more likely that they will be willing to go to bat for you when the time comes. 3. Be aware of how time consuming it can be to build a case to support a termination for cause. Drafting lengthy notices and compiling documents and correspondence for a Rule 8 file for your attorneys is not a pleasant way to spend several weekends. 4. Sometimes in contracting, it doesn't matter how right you believe you are, or how strong a case you think you have against a contractor. The interests of the agency may dictate pursuing a different course of action. As a leader, you'll need to get behind that course of action. In the end, contract B provided us the system we needed with all the required functionality and has performed beautifully to date.
  3. For anyone that followed this thread last year, I thought I'd provide an update on how it ended. After issuing the termination notice and claim for reprocurement costs, the contractor challenged the termination at the Civilian Board of Contract Appeals. For context, the primary reason for terminating the contract for cause was because the contractor failed to deliver a working system within the 30-day extension the CO provided after having re-established the delivery schedule. The issue of re-establishing the delivery schedule was discussed separately on this Wifcon thread: Unfortunately, despite spending countless hours researching court/board decisions, legal blogs and other references, and drafting a series of notices to ensure our termination was procedurally solid, our attorneys did not believe they would prevail in court. They recommended we settle with the contractor. Part of the draft settlement agreement required the contractor to return a small portion of the amount we paid. Unfortunately, the contractor also demanded a satisfactory past performance rating in CPARS. Ultimately, we decided to walk away from the partial refund and instead converted the termination into a termination for convenience and gave the contractor a past performance rating that accurately reflected their performance. From the date of termination, settlement discussions, to the Reviewing Official finalizing the evaluation in CPARS, the entire process took a year. There were some significant lessons learned from the contracting process on this procurement that got us to the point of having to terminate the contract. But there were also some lessons learned about the termination process itself. Among them: 1. Ensure that your attorneys and leadership are onboard and ready to support a termination for cause or default before embarking on that path. 2. Maintaining a strong working relationship with your attorneys will make it more likely that they will be willing to go to bat for you when the time comes. 3. Be aware of how time consuming it can be to build a case to support a termination for cause. Drafting lengthy notices and compiling documents and correspondence for a Rule 8 file for your attorneys is not a pleasant way to spend several weekends. 4. Sometimes in contracting, it doesn't matter how right you believe you are, or how strong a case you think you have against a contractor. The interests of the agency may dictate pursuing a different course of action. As a leader, you'll need to get behind that course of action. In the end, contract B provided us the system we needed with all the required functionality and has performed beautifully to date.
  4. I agree with bob7947. The contractor must first figure out the amount of the refundable tax credit to which it is entitled under the FFCRA (Division G) before it can seek relief under section 3610 of the CARES Act (Division A). That shouldn't be too difficult to do; however, because the CARES Act was enacted in March and FFCRA did not go into effect until April 1, contractors will have to look to CARES to recover reimbursement for the cost of paid leave they provided to their employees during parts of March to keep them in a ready state and to protect contractor-employees and federal employees. Of course, other conditions must be met, too to recover under CARES. The reason for the paid leave must have been because the job site (e.g., building) was closed or because other restrictions were in place, AND the contractor's work was not portable, meaning the work could not be done remotely. For example, we instructed employees and contractors not to come to our building if they were exhibiting flu-like symptoms, if they had been tested for COVID-19, tested positive for COVID-19 or if they felt ill, or if they had been in contact with anyone that had these symptoms. If their work was not portable (e.g., maintenance technicians, lighting technicians), the restriction we imposed entitles them to recover under CARES. Also noteworthy, FFCRA also provides funds to employers to allow its employees to take leave for childcare reasons if a child's school is closed. However, CARES does not appear to provide authority to reimburse contractors for leave they give their employees to stay home for childcare reasons. So, unless FFCRA is applicable retroactively, contractors who provided paid leave for childcare reasons in March may not be able to recover under CARES.
  5. Circling back to report that after reviewing several active FAPIIS records, we found that it is common for the CO to attach the termination notice and the termination modification. I didn't see an instance of a CO posting a copy of the CO's memo to file, but that does not mean it isn't permissible. The contractor has a 7-day period to review the information and assert to the CO that the posted information is covered by a disclosure exemption under FOIA. At that point, the CO must within 7 calendar days remove the posting while it determines whether the information is releasable or protected. If it isn't, the information can be re-posted. So it seems that the CO can pretty much post anything it deems appropriate for other agencies to review when making responsibility determinations, unless the contractor claims the information is exempted from release (and the CO confirms this). It is worthy to note that the information is publicly viewable 14 days after the CO posts it in FAPIIS.
  6. Thank you, Joel. I was hoping to also elicit some feedback about the appropriateness of posting the termination notice or the memo to file.
  7. When reporting a termination for cause in FAPIIS, what documentation is appropriate or permissible for the contracting officer to attach to the record? For example, should or can the contracting officer attach the termination notice to the FAPIIS record if it explains in detail the basis for the termination? What about the CO's memorandum to the contract file; should or can it be attached to the FAPIIS record? If it is appropriate or permissible to attach these documents to the record, is it advisable to do so? Why or why not?
  8. So true! I'll be back with more questions or with updates once the dust settles.
  9. Jacques, this is incredibly helpful. Thank you. To both you and Retreadfed, I edited my original post in hopes of making it clearer. I deleted some details that perhaps didn't matter much, so I hope it makes better sense now. In any event, your responses provided me with what I needed. Much appreciated!
  10. Thank you, ji20874. There are no excess costs that would result from exercising the options because pricing on those services is similar on both contracts. The agency is only looking at the implementation (base period), because those were costs the agency should not have had to incur again. But you might be right in that the agency may not be able to recover them. Your possible approach seems reasonable too. The agency didn't anticipate being in that situation, so they did not plan for it.
  11. Question Has anyone come across a case where the COFC or one of the BCAs sustained or awarded reprocurement costs for a procurement that was conducted in anticipation of needing to terminate a contract; i.e., before the contract was terminated? Scenario The agency enters into contract A for a critical system. After its partial implemention and placement into operation, any lapse in the system's operation would lead to disastrous consequences for the agency. Although the system is deployed with some core functionality, the contractor is still working to complete the configuration of all of the system's features and capabilities in order to fully implement the system. During the course of the contractor's configuration and implementation of the system, the contractor begins to demonstrate deficient performance. Its lack of diligence and repeated failures indicate that the agency cannot be assured of the contractor's performance. The agency begins to consider whether it may need to terminate contract A if the contractor does not complete the system's implementation by the contract's completion date. However, the agency recognizes that it cannot terminate the contract without having a backup (replacement) system configured and ready to be placed into operation in the event that it determines that it needs to terminates the contract. The agency conducts a new procurement and enters into contract B for a backup system and successfully implements the system, but does not place it into operation. Shortly thereafter, contractor A defaults, so the agency places the backup system into operation, the CO terminates contract A and assesses reprocurement costs (against contractor A) for the cost of contract B's implementation phase. The CO assesses reprocurement costs on the principle that it would not have had to incur costs on a second procurement for a backup system if contractor A had fulfilled its obligations. The agency's risk mitigation strategy to award a second contract for a backup system seems reasonable based on the contractor's deficient performance and the contractor's eventual default seems to validate the agency's decision to procure a replacement system as a precautionary measure. But how likely is the agency to prevail in recouping reprocurement costs for contract B, which the agency awarded prior to terminating contract A? Is anyone familiar with a similar case, or with any case in which reprocurement costs were assessed for a procurement conducted prior to terminating a contract?
  12. Retreadfed, FAR 12.403(c)(2) states: The Government’s rights after a termination for cause shall include all the remedies available to any buyer in the marketplace. The Government’s preferred remedy will be to acquire similar items from another contractor and to charge the defaulted contractor with any excess reprocurement costs together with any incidental or consequential damages incurred because of the termination. Seems too simple. Is this what you were looking for, or did I misunderstand your question?
  13. Joel, I'm not teleworking! Retreadfed, I will leave it at " all rights and remedies provided by law", which would include case law. Unfortunately, I did not select the most anonymous user name when I set up my account years ago, so I prefer not to go into much detail at this point, since anyone can be reading this and could use anything here to strengthen their own arguments. We are confident in our position, but uncertain whether we will prevail in obtaining reprocurement costs. To clarify, we will only pursue reprocurement costs associated with the portion of the new contract attributable only to the implementation portion, which we would not have had to pay again if we remained with the current provider. However, the cost of the new solution will actually cost less on a yearly basis once it is in production (operational) mode, so we are aware that this will factor into any decision to award costs. Again, I apologize if I don't stay on top of the conversation, but I am at work and constantly running to meetings. However, I am checking in every now and then. If a case gets published, I will update the thread (if the thread hasn't been locked) with a link to the decision.
  14. We did in fact re-procure a backup system anticipating the potential for needing to terminate the contract in order to have a seamless transition. Not having a seamless transition would subject us to significant liability from other parties. However, you are correct. No guarantee that we will recover that cost. At this point, we are just happy to be moving on. We will make as strong a case as possible.
  15. I appreciate everyone's feedback and the discussion, and I regret that I did not check back here to contribute further before going on holiday. Here's what we did shortly after my last post: 1. Cure notice is not required for late delivery, but we issued what amounts to a cure notice, which specified the deficiencies, provided a new delivery date with 30-days to correct the deficiencies, and advised of possible termination for cause. 2. Because we could not afford a gap in performance of the critical IT system, we procured a replacement system as a backup in anticipation of needing to transition to it. Because we were unsure whether the current contractor would come through and deliver, we structured the replacement contract with a base period consisting only of the configuration and implementation phase. Exercising the first option would place the system into production (full operation). 3. When we did not receive the completed IT system on the new delivery date, we issued a show-cause notice, which informed the contractor that we planned to terminate the contract for cause, unless the contractor showed cause why we should not terminate on that basis. 3. The contractor did not show adequate cause for late delivery, so we decided to terminate the contract and will exercise the option on the replacement solution to bring it online while we transition off the deficient system. We will leave corresponding past performance and will pursue re-procurement costs.
  16. ji20874, yes, the CO has conferred with legal counsel, but the attorney had not encountered this situation in the past. Despite this, the attorney agreed that we should be able to do this unilaterally. I cannot respond to the remainder of your questions without starting a new thread, since it opens up an entirely new topic. More to come! Retreadfed, the intent is to re-establish a delivery schedule that is 30-days from the date of the notice. In other words, 30 days from today. They've had their 90 days, plus another 7 months worth of delays. We have notified them that we've moved the delivery date 30 days from today and may terminate for cause if they don't deliver.
  17. Retreadfed, thank you for commending. 30 days because they have already received 7 months worth of implied or constructive extensions and each time they promise to deliever something, it is only a couple of days or weeks away.
  18. Question: Is it legally permissible for the Government to re-establish a delivery schedule unilaterally on a contract for commercial services that includes FAR 52-212-4(c), when the Government, through its inaction, previously waived timely delivery (DeVito waiver?) Scenario: Agency enters into a contract for a critical IT system. The contract specifies that the contractor must fully implement the system within 60-90 days after the contract award date. The contractor misses the required completion date. However, because the agency needs this system, the program office continues, informally; i.e., without contract modifications, to allow the contractor to continue working on the system. The contractor continues to promise delivery and continues to miss delivery. Now the parties are 10 months into the contract, the contractor is still working, and the agency still does not have a working system. The agency knows that the contractor will not sign a bilateral modification agreeing to a 30-day extension to reset the delivery schedule. Can the Government re-establish the delivery schedule by written notice to the contract; i.e., through a letter from the CO, or can the CO issue a unilateral modification to re-establish the delivery schedule; despite the language of 52.212-4(c), which requires that all changes to T&Cs be made bilaterally? The purpose of re-establishing the delivery schedule is to re-establish the government's right to terminate the contract for cause for late delivery because it waived its right when it did not terminate the contract the first time the contractor missed the delivery date. If such a unilateral action were impermissible, by forbearing termination for cause within a reasonable time after the breach (late or missed delivery), agencies later would be incapable of re-establishing a delivery schedule when a contractor does not agree to a new deadline. Is this the case? Editing to add: We can terminate for failure to make progress or provide adequate assurance of performance. But can we re-establish the delivery schedule unilaterally?
  19. I had not seen the definition for CFA until you pointed it out.Thank you for the correction.
  20. 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.
  21. 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.
  22. 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?
  23. 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.
  24. 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.
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