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Vern Edwards

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Posts posted by Vern Edwards


  1. I do not think Justice1's company experienced a cost overrun. What happened was that the contractor completed the LOE two months before the period of performance expired. The company continued to work during the remaining two months, delivering additional level of effort without contractual coverage. The government had planned to buy additional LOE during the remainder of the period of performance, but balked for some reason, exercising an option early, instead. The contractor has not been paid for the extra work performed during the final two months.

    The result is that the contractor has not recovered some G&A costs incurred during the last two months of the period of performance. In my opinion, unless the government agrees or is forced to pay for the unfunded, voluntarily performed additional LOE, the company has no chance of recovering the last two month's G&A. The job was over after 10 months.

    This is what happens when people dealing with the government don't think and act contractually. You cannot deal with the government the way you deal with private sector firms, where much is done by handshake.


  2. The following is from training materials published online (https://www.google.com/search?q=G%26A+allocation+base&rlz=1C5CHFA_enUS628US655&oq=G%26A+allocation+base&aqs=chrome..69i57.5439j0j7&sourceid=chrome&ie=UTF-8):

    Selecting a G&A Base

    Background

    In general, Government contractors are constrained to use of three specific bases for allocation of the General and Administrative (G&A) costs of the organization. The bases are defined in Cost Accounting Standard 410 (48 FCR 9904.410), but are incorporated into the FAR in 31.203.

    First and by far the most common of the three is the cost input base, often referred to as Total Cost Input or TCI. With the TCI base, all costs that are not G&A and not statutory unallowables (such as interest or Federal income tax) are part of the G&A base. It is also the simplest of the G&A bases and usually (but not always) accepted by Government auditors without any real question.

    Second most common and growing in popularity is the Value Added G&A base. With this allocation base, material costs and certain subcontracts are excluded from allocation of G&A. Such costs may or may not be subject to allocation of other kinds of costs. Many firms using a value added G&A base collect the cost of purchasing, processing, and administering (but not managing) materials and subcontract purchases in a so-called Material Handling or Material & Subcontracts pool. These are often referred to as MH or M&S pools and the costs collected in such pools are applied to materials and subcontracts in lieu of G&A.

    The third and somewhat rare G&A base is called Single Element. It is sometimes also referred to as a single pool allocation because the methodology involves collection of all indirect costs in a single pool and allocation of those costs over a single cost element (such as labor). Such a pool would include everything from fringe benefits to facilities costs to bid and proposal costs. It is intended for use by very small services companies – usually on a manual or semi-manual system – as an administrative convenience. It is rarely approved by auditors and is therefore only seen primarily in firms prior to their first audited contract.

    The Government’s Position on G&A Allocation Bases

    In the regulation (FAR and CAS) and in the audit guidance (such as the Defense Contract Audit Manual or DCAM), the official position is that each company should use the allocation base for G&A that best reflects total business activity and, therefore, results in the most equitable allocation of G&A expense across all contract (both Government and commercial). In theory, the Government has no preference for one base over another so long as the resulting allocation is equitable.

    In reality, the Government has traditionally been heavily biased toward the TCI base and resisted efforts of contractors to change to the VA base. Recent Government regulation, however, has been aimed at making “excessive pass-through costs” unallowable on Government contracts. Translation – the Government really doesn’t want to pay for G&A on large subcontracts. (Please see separate whitepaper on Excessive Pass-Through Costs) This has resulted in a slowly shifting attitude towards use of the VA base for allocation of G&A expense.

    The new regulation on excessive pass-through costs has an exception in it specifically to allow the costs of Material Handling or Material & Subcontract rates. For this reason, many Government contractors currently using a TCI base are considering a switch to the VA base. 


  3. 5 hours ago, Fara Fasat said:

    What courses of action are available to the government? I'm not asking about theories of recovery; I'm asking how. What contractual methods does it have to recover the cost of replacing the equipment, which exceeds the annual price it is paying the contractor for the maintenance?

    The CO would make a government claim against the contractor. If the parties couldn't settle the CO would issue a final decision demanding payment, which would create a contract debt, and the CO would commence collection procedures. See FAR Subpart 32.6. The contractor would then have to decide whether to pay or appeal to a board or to the Court of Federal Claims.


  4. 15 minutes ago, here_2_help said:

    Had you stopped work when you reached your funding limits, you might be on stronger ground, because then you could argue that your provisional billing rate calculations were based on a full year's worth of direct labor, and the resulting shortfall in direct labor led to higher indirect rates than originally calculated.

    help:

    It was a level of effort task order. What if the contractor delivered the full level of effort, but delivered it sooner than planned, which seems to have been the case? There was no shortfall in direct labor, but it was expended in less than a year. How if at all would that affect the contractor's argument?


  5. Because of the funding and contract structure they would look down to the CLIN level.

    It doesn't matter that the government requested the extra work. You knew that you didn't have to do it under contract and that it wasn't funded. You took your chances. I don't know what your chances are with DCMA, but I suspect they're not good.

    Be careful about invoicing for payment to which you know you are not entitled under the terms of the contract. "Under bill" might be a false claim.

    Sympathy with small businesses goes only so far. Most people in the contracting business will not feel sorry for a company that performed at risk and can't get paid for it.

    Consult an attorney before you do anything.


  6. 12 hours ago, Justice1 said:

    Question 1:  What (if anything) do we need to do now related to the cost overrun (with DFAS, PCO, etc.)

    Question 2: Can a cost overrun on an individual CLIN be recouped if there are available funds on the task order overall when we close out the task (years from now) with DCMA? 

    Seven questions:

    1. Option 1 ran from 1 Jan 2017 to 31 Dec 2017 and was funded with Fiscal Year 2017 money. Is that right?

    2. The final option ran from 1 Jan 2018 to 31 Dec 2018 and is funded with FY 2018 money. Is that right?

    3. During Option 1 you ran out of LOE and funding after 30 Sep 2017, during FY 2018, and you then worked at risk. Is that right?

    4. The work performed at risk was done after 30 Sep 2017. Is that right?

    5. The government had planned to increase the Option 1 LOE and funding using FY 2018 funds, but then decided that they could not do that. Is that right?

    6. You have not been paid for the work done at risk during Option 1. Is that right?

    7. You want to know if there is any way to get paid for the work done at risk during Option 1 with the unused FY 2018 funds obligated for the final option. Is that right?

    If the answer to each of those questions is yes, then I think that the government erred in thinking that they couldn't use FY 2018 funds to pay for the additional work done under Option 1 after 30 Sep.

    I don't know why they thought they couldn't apply FY 2018 funds to Option 1. The addition of LOE to Option 1 would have been an out-of-scope mod. Since the out-of-scope addition of LOE would have been for work to be done after 30 Sep 2017,  during FY 2018, it would have been a bona fide need of FY 2018 and would have had to be funded with FY 2018 money. See Principles of Federal Appropriations Law 3d, Vol. I, Ch. 5. The government should be able to mod Option 1 to add LOE to cover the work done at risk, fund it with FY 2018 money, and then pay you for the work done at risk. They would have needed to justify and get approval for a sole source procurement. Depending on how the contract is written, it may have been improper for them to exercise the final option "early".

    What you have ahead of you is a challenge in the art of persuasion. The biggest problem you would have in trying to get this fixed is that someone in the government is going to say that they cannot mod Option 1 after the fact, because it's "expired", "dead", and you cannot modify an expired/dead option. That would be wrong, but good luck convincing them. On the other hand, shame might prompt them to act on your behalf.

    Do you have a valid claim for payment for the work done at risk? I don't want to speculate. You might if you retain a good lawyer. Otherwise...

    BTW, it appears that the task order was cost-reimbursement. If so, you may not have had a "cost overrun" in Option 1. If you delivered the original LOE at or within the estimated cost, then the extra LOE you provided at risk was not an overrun. It was additional work.


  7. 22 hours ago, lotus said:

    I've often wondered why the Govt is so cliquish when it procures services.  It's requirements are of the nature of who you are rather than what you do... If Joe Felon is better at what is to be done, then he should be chosen.

    I think your premise, that the government is "cliquish",  is unproven. What you can do and how well you can do it is part of who you are, as is what you have done in the past.

    I'm in business, and I regularly do business with people based on who they are. And I always prefer doing business with people with whom I've done business in the past, who have done a good job, and whom I know that I can count on in the future. I know they are someone who can do the job. People with credentials (or a good sales pitch), but with whom I've had no experience, are just that, and a higher risk. Once I find a good vendor, I stick with them. Does it sometimes cost me more? You bet, and it's worth it, as you know if you've ever had a critical vendor fail you.

    Who they are is what they have done and can do.


  8. 30 minutes ago, MAY-D-FAR-B-WIT-U said:

    It seems we got what we paid for (support) but we will still proceed to discuss availability issues with the contractor.

    Look at your CLIN description(s) and at the associated SOW. Did you specify process, result, or manning (pardon the sexist term). Did you specify any combination of those? If you did not specify manning, then you probably got what you paid for.


  9. This was the original post:

    On 12/11/2017 at 12:10 PM, MAY-D-FAR-B-WIT-U said:

    We have a FFP TO awarded again a GSA Oasis Contract (16.5 not 8.4), the contract has a SOW to provide support services in different areas (PM, Acquisition, Logistics, e.t.c.) and payment is made monthly for 1/12th of the total price. The total value of the contract was determined by estimating the number of hours needed for different LCATS. Although the labor hours and labor rates were never incorporated into the contract, we have bilaterally made several changes to the contract, increasing and decreasing the estimated hours required to provide the support needed. One of the CORs (contract supports several programs and we have 2 CORs) just notified us that one of the contractor personnel was only at his duty location about half the time  in the last few months and he was completely absent last month. The contractor invoiced and was paid in full for both months.

    The COR kept track of the exact hours worked, but I am not sure how much good this does with a FFP contract. I asked the COR to identify the section in the SOW that was not performed due to the absent employee, which he did , but I have been told by more experienced Specialist and KO's that there is nothing we can do but ding them in a CPARS because its a FFP TO. Do we have any recourse to recoup an of the money paid or at least negotiate some consideration. The TO has 52.232-1 and has 4 option years left. I welcome and appreciate all input.

    Emphasis added.

    The answer to the question depends on whether the contract stipulates that the contractor is obligated to place a specific worker or specific kind of workers at the "duty station" in question during specific time periods. If it does, then I think you might be able to recover some part of the payments made. If the contract does not so stipulate, then I do not think that you can recover the payments in court unless you can show that the service provided during the months in question did not conform to the SOW in some other way due to the absence of the personnel in question. Of course, you can always just ask the contractor to return what you consider to have been an overpayment.

    That's a half-baked answer, but the best that I can do based on the information that you have provided.

    @MAY-D-FAR-B-WIT-U

    You posted to the forum for beginners, so I assume that you are a beginner in contracting. Since you are a beginner, I hope that you have learned something from the responses that you have received here---not about the answer to your question, but about the nature of contracting. I will not recommend a contract type for your requirement, but I will say that it sounds like it should be some form of level-of-effort type.


  10. That's good news! Congratulations. Glad legal joined the team.

    3 hours ago, fedcontract said:

    Our legal counsel's initial position was that once the current PoP ended our contract had "expired" and the only option was to issue a new contract; however, I think you have a great point that if we can modify for other reasons years later, then nothing should be specifically preventing us from bilaterally modifying to extend right now.

    Your legal counsel's position is the position that 99 out of 100 contracting practitioners would take. The contract "dies" after the period of performance expires and you cannot raise a contract from the dead. I don't mind them taking that position as long as they ground it in a sound argument supported by something other than a vague sense of unease. However, I think it's demonstrably untrue. Contracts do not necessarily die when the period of performance ends.


  11. One problem I have is that I write so much stuff I can't remember when I wrote about something. I wrote about the problem of untimely exercise of options and CICA in The Nash & Cibinic Report in 2013. While the article does not address the problem of extension by supplemental agreement vs. new contract, it might be of interest, so I've copied it below. If I were writing it today I would say some things differently. I would say "period of performance has expired" instead of "contract has expired." But I stand by my main conclusions. Where I use the pronouns "we" and "ours" I am speaking from Prof. Nash and myself. I don't agree with all of the things the GAO said in the quote from their decision.

    The Nash & Cibinic Report, August 2013

    ¶ 40. LATE EXERCISE OF OPTIONS: What Are The CICA Implications?

    Vernon J. Edwards

    What, if anything, do the Competition in Contracting Act and Federal Acquisition Regulation Part 6, “Competition Requirements,” require a Contracting Officer to do when he has inadvertently failed to exercise an option within the deadline for doing so? Let’s review the regulations and consider three scenarios.

     The Regulations

    Suppose that an agency competitively awarded a firm-fixed-price service contract with a period of performance of one year and a priced one-year extension option. The option clause in the contract, FAR 52.217-9, “Option To Extend the Term of the Contract (MAR 2000),” states, in pertinent part:

     (a) The Government may extend the term of this contract by written notice to the Contractor at least 30 working days before the contract expiration; provided that the Government gives the Contractor a preliminary written notice of its intent to extend at least 60 days before the contract expires. The preliminary notice does not commit the Government to an extension.

     FAR 6.001, “Applicability,” states:

    This part applies to all acquisitions except—

     ***

    (c) Contract modifications, including the exercise of priced options that were evaluated as part of the initial competition (see [FAR] 17.207(f)), that are within the scope and under the terms of an existing contract;

     FAR 17.207, “Exercise of options,” states, in pertinent part:

    (a) When exercising an option, the contracting officer shall provide written notice to the contractor within the time period specified in the contract.

     ***

    (c) The contracting officer may exercise options only after determining that—

    (1) Funds are available;

    (2) The requirement covered by the option fulfills an existing Government need;

    (3) The exercise of the option is the most advantageous method of fulfilling the Government’s need, price and other factors (see paragraphs (d) and (e) of this section) considered;

    (4) The option was synopsized in accordance with [FAR] Part 5 unless exempted by 5.202(a)(11) or other appropriate exemptions in 5.202; and

    (5) The contractor is not listed on the Excluded Parties List System (EPLS) (see FAR 9.405-1).

    ***

    (f) Before exercising an option, the contracting officer shall make a written determination for the contract file that exercise is in accordance with the terms of the option, the requirements of this section, and [FAR] Part 6. To satisfy requirements of Part 6 regarding full and open competition, the option must have been evaluated as part of the initial competition and be exercisable at an amount specified in or reasonably determinable from the terms of the basic contract, e.g.—

    (1) A specific dollar amount;

    (2) An amount to be determined by applying provisions (or a formula) provided in the basic contract, but not including renegotiation of the price for work in a fixed-price type contract;

    (3) In the case of a cost-type contract, if—

    (i) The option contains a fixed or maximum fee; or

    (ii) The fixed or maximum fee amount is determinable by applying a formula contained in the basic contract (but see [FAR] 16.102(c));

    (4) A specific price that is subject to an economic price adjustment provision; or

    (5) A specific price that is subject to change as the result of changes to prevailing labor rates provided by the Secretary of Labor.

    Three Scenarios

    Assume that the CO properly made all of the determinations in paragraphs (c) and (f) prior to the issuance of the preliminary notice of intent to exercise the option. Now consider three scenarios: 

             (1) The CO gave timely preliminary notice, but did not give the contractor timely written notice of the exercise of the option. The contract period of performance has not yet expired.

             (2) The CO gave timely preliminary notice, but did not give the contractor timely written notice of the exercise of the option. The contract period of performance expired two weeks ago, but the contractor continued working.

             (3) The CO gave timely preliminary notice, but did not give the contractor timely written notice of the exercise of the option. The contract period of performance expired two weeks ago, and the contractor stopped working at its end.

    In every case, the CO’s failure to exercise the option was due to administrative oversight, and the contractor is willing to waive the CO’s failure to meet the deadline. May the CO go ahead and extend the contract by exercising the “option,” or must he conduct a new procurement and either seek full and open competition or justify a sole-source acquisition? Apparently, failure to process option paperwork in a timely fashion is not unheard of, and we recently became aware of two such cases. In each case, agency counsel or contracting staff told the CO that he could not exercise the option.

    As far as we have been able to determine, this issue has not come before the Government Accountability Office very often, and apparently never before the U.S. Court of Federal Claims. The GAO has treated late option exercises as sole-source contracts. See Washington National Arena Limited Partnership, Comp. Gen. Dec. B-219136, 65 Comp. Gen. 25, 85-2 CPD ¶ 435, 1985 WL 50837, an early CICA decision. In that case, the agency extended a contract four months after its expiration. The GAO sustained the protest on this issue, stating:

    "We agree with [the protester] that this attempt [to extend the contract] was improper. Upon expiration of [the contractor’s] contract, neither the government nor [the contractor] was obligated by any of the contract terms; [the contractor] no longer was bound to provide visitor reservation services, and the government no longer was bound to pay [the contractor] commissions for such services. The unexercised option provisions were part of the contract and, thus, necessarily expired when the contractual relationship was terminated. Thus, the attempted retroactive extension of [the contractor’s] contract was not an extension at all—there was no contract to extend—but the noncompetitive creation of a new contractual relationship with [the contractor].

    Under CICA, agencies are required to “obtain full and open competition through the use of competitive procedures” in procuring property or services. 41 U.S.C. § 253 [now 41 U.S.C. § 3301]. Certain exemptions from the competition requirement are listed, but it does not appear from the record, and [the agency] does not argue, that any of these exemptions would apply to justify a noncompetitive award to [the contractor] under the circumstances here. Consequently, we sustain the protest on the ground that [the agency] should have conducted a competitive procurement for these visitor reservation services."

    See also Acumenics Research & Technology, Inc.—Contract Extension, Comp. Gen. Dec. B-224702, 87-2 CPD ¶ 128, 1987 WL 102680, and WSI Corp., Comp. Gen. Dec. B-220025, 85-2 CPD ¶ 626, 1985 WL 53711."

    In none of our scenarios can the option be exercised in accordance with its terms, as appears to be required by FAR 6.001(c) and FAR 17.207(a) and (f) for exercise to be exempt from CICA, since the CO missed the deadline. The deadline is one of the terms of the option.

    In Washington National, the agency appears to have consciously decided not to extend the contract and then changed its mind, whereas in our scenarios the failure to exercise the option was an oversight. Moreover, four months had passed between the expiration of the contract and the modification to extend it, during which time the then former contractor apparently did not perform. Our scenarios can be distinguished in several ways. In our first scenario, in which the contract has not yet expired, the CO could argue (a) that the parties are still in a contractual relationship and (b) that the matter is thus one of contract administration and the contractor can waive the CO’s failure to provide timely written notice. In our second scenario, in which the contract has expired but the contractor has continued to work, the CO could argue that while he did not formally exercise the option on time he had provided the preliminary written notice and that the contractor’s continued performance shows that he had “constructively” exercised it with the contractor’s assent.

    Our third scenario is more problematic. The original period of performance expired and the contractor stopped working. However, the CO could argue that he issued a timely preliminary notice, his failure to exercise the option was an administrative oversight, not an intentional decision let the contract come to an end, and the two-week period in which the contractor had stopped work was very brief in comparison with the four months in Washington. That might be enough to distinguish the situation from Washington National. But while the third scenario might not fall squarely within the shadow of Washington National, it certainly falls within its penumbra. We suspect that in the first scenario, in which contract has not yet expired, the CO might get away with late exercise of the option. We are doubtful about the other two scenarios, especially the third.

    As Ralph and Steve Feldman discuss in 1 GOVERNMENT CONTRACT CHANGES § 11:34 (2013), the boards and courts have, on occasion, treated the improper exercise of an option as a constructive (within scope) change, even though continued performance could have been ordered under the “Changes” clause. See, e.g., Griffin Services, Inc., ASBCA 52280, 02-2 BCA ¶ 31943, 2002 WL 1788533, and General Dynamics Corp., ASBCA 20882,77-1 BCA ¶ 12504, 1977 WL 2191. In one case, Alliant Techsystems, Inc. v. U.S., 178 F.3d 1260 (Fed. Cir. 1999), the contractor asserted that the exercise of an option was improper and ineffective and submitted a claim seeking a declaration that it was not required to perform. The Government terminated the contract for default when the contractor refused to perform as demanded by the CO. The Federal Circuit held that the exercise of the option had not been in accordance with the clause and was thus ineffective. However, the court also held that under the “Disputes” clause the contractor had been required to “proceed diligently” with the CO’s order to perform pending final resolution of the claim, because the claim arose under that clause and was thus a claim “arising under” the contract.

    We have no idea whether such administrative oversights happen often. We suspect that when they do happen the parties simply complete the paperwork after the fact and go on about their business, which seems a reasonable thing to do in light of the disruption and amount of work that would follow from a decision not to do so. Moreover, it seems unlikely that a prospective protester would become aware of what happened. Of course, such oversights should not happen at all. VJE 


  12. I'm not sure it makes a difference. Remember, the contract is cost-reimbursement. The contractor invoices on the basis of allowable cost incurred to deliver the level of effort. not by the hour at a fixed rate. There could be more to the cost of the level of effort than direct labor hours. If the subcontract cost is allowable, then the contractor invoices for it and the government reimburses up to the estimated cost or the total funds allotted.


  13. 18 hours ago, MAY-D-FAR-B-WIT-U said:

    Do we have any recourse to recoup an of the money paid or at least negotiate some consideration. The TO has 52.232-1 and has 4 option years left.

    This is a classic example of a question to which the answer depends entirely on a close reading of the actual contract language as a whole. The question cannot be answered reliably on the basis of a secondhand description of what the contract says and the relating of a few facts, especially a muddled relating. 


  14. 1 hour ago, FrankJon said:

    That may technically be correct, but in the case of a recently-missed option, I simply do not believe that many COs would supplement the file documentation outside of the J&A. Most, I believe, would treat if it the extension were the option for file documentation purposes. I'm basing this belief on a related, but different situation that I've seen often: extension of a contract during performance, where 52.217-8 was not evaluated at the time of award, so a J&A is required. In this case, I've never seen a CO augment the file documentation beyond the J&A and POP modification. Instead, they treat the contract as if 52.217-8 is still the mechanism extending the contract, vice the J&A.

    What does what most COs would do, and what you have seen COs do, have to do with the points that I have made?

    1 hour ago, FrankJon said:

    Even if we assume that the CO were to fully supplement the modified file with all-new updated documentation (which I maintain is a stretch), taking into account real-world factors such as system lag, communication gaps, file construction, etc., a bilateral, supplemental modification will ordinarily save significant time over a new award for the same requirement. (My definition of "significant" for this example is 4 hours, or half-a-day.)

    Well, if you think that four hours or half a day is a significant savings of time, then I won't argue.

    1 hour ago, FrankJon said:

    The scenario is far-fetched, but not implausible.

    Huh? :huh: Look up far-fetched and implausible. Really, FrankJon, that's a hoot. :lol:

    59 minutes ago, FrankJon said:

    I also don't see what gave you this impression [that the OP understands that extending the contract after expiration of the option would be a sole source procurement requiring a J&A]..

    This:

    22 hours ago, fedcontract said:

    The GAO cases that address modifications to extend missed options appear to be silent on the issue of "how" to do it properly. They focus on the fact that these can be considered unjustified sole source actions (which ours will not be because we have a J&A)....

    It is well established that out of scope work can be added to a contract through bilateral modification.

    FrankJon, I don't understand why you have posted in this thread. I don't know if you are trying to understand one of my points, trying to dispute one of them, or are trying to make a point of your own. But I'll continue with you if you have anything useful to say.


  15. 1 hour ago, FrankJon said:

    Depending on the requirement and what the CO wants, a new award could require all of the following: revised IGCE, revised PWS, an updated Market Research Report, OSBP/SBA approval, public notice, price/cost analysis, responsibility determination, and/or FPDS-NG report. Some of these may seem superfluous in context, but there can be a lot of pressure on COs to have "model" contract files at the expense of efficiency. Not to mention regenerating, adding, deleting, and completing clauses/provisions, and the inherent joy that comes with using contract writing systems running on archaic technology. If I were the CS/CO in this case, I would have a strong impulse to avoid the above if possible.

    What are you talking about?

    If a CO fails to exercise an option in a timely manner, a contract extension would be, by definition, out of scope. Extending such a contract on a sole source basis would be a new procurement requiring a J&A and all of the procedures and file documentation of any other new procurement, whether it is done by supplemental agreement mod or a new contract document with a new contract number. The OP, fedcontract, understands that. As I told the fedcontract, the difference would be mainly clerical and not worth arguing about. All the same, it's ridiculous for his legal office to object to a supplemental agreement solely on the ground that the period of performance has expired, and I see no reason to put up with ridiculous objections from a legal office. Especially from a legal office. I expect more from them.

    1 hour ago, FrankJon said:

    Assuming what you are saying is true (news to me), this seems could lead to some absurd situations. For instance, whereas most COs would probably only think to extend a contract that is "recently expired," what about the CO who decides to pick up any decaying husk of a contract (FY16 POP end? FY15? FY14?) and extends that because it would be administratively simpler and somehow justifiable on paper?

    Again, doing a bilateral mod instead of a new procurement would not be that much simpler. In fact, after so much time had passed it probably would be easier to write a new contract than a supplemental agreement. In any case, since the mod would require a J&A, do you think the CO would wait three or four years to request approval to extend a service contract on a sole source basis? If he did, do you think he would get it? Do you think the contractor would agree to the same prices as had been stipulated for the three or four year old expired option? Please don't waste my time with half-baked reductio ad absurdum arguments.

    1 hour ago, FrankJon said:

    Why not completely circumvent CICA this way if that's what the CO feels like doing?

    Huh? In light of what I've said, how would extending the contract by supplemental agreement instead of by preparing a new contract document circumvent CICA?

    Read the thread again.


  16. 4 hours ago, fedcontract said:

    Is there ever a situation when it is proper/legal to mod an expired contract?

    What do you mean by "expired contract"? When does a contract "expire"? I know when the completion or delivery schedule or the period of performance of a contract expires, but many contractual obligations continue in effect for years after those dates. Liability for latent defects might continue for up to six years after delivery. The contractor's right to submit a claim to the CO continues for six years after the event which commenced the accrual of the claim. Obligations under warranties may remain in effect for many years. Obligations to retain records and cooperate with government auditors remain in effect for years after final payment. So when does a contract "expire"?

    I know of no statute, regulation, or common law doctrine to the effect that the parties to a government contract cannot extend that contract after the delivery schedule or the period of performance has expired. Go down to your legal office, go to the cubicle of the person who says that you can't modify an "expired contract", and demand that he or she show you the law, regulation, court, or board decision that supports their contention.

    If you can modify a contract years after the period of performance has expired in order to settle a claim, you can modify it after the period of performance has expired in order to extend that period. If the person in your legal office insists that you can't, demand that they show you where it says so. 


  17. I don't agree with it, either. But why argue about it? There is no law or regulation about it that I know of. The difference in your case between issuing a mod and writing a new contract is mainly clerical. A new contract might be a little more paperwork, but not enough more to make it worth arguing about.

    P.S. You intended to exercise the final option, not "issue" it.


  18. 37 minutes ago, kevlar51 said:

    In OP's case, I'm not sure where the extra funding is coming from for the FFP subcontract if he doesn't want to tie it to the LOE (assuming the estimated cost is tied to the LOE).

    Extra funding? I don't understand what you're talking about. I presume that the contractor included the cost of the subcontract in its estimated cost for the LOE.

    37 minutes ago, kevlar51 said:

    Employees (and lower management assigning them to tasks) will want to maintain as many hours as possible for their own staff to keep them working on Government funds. 

    Or maybe the contractor's upper management will want to assign the employees to other work or cut them loose.


  19. On 12/9/2017 at 12:48 PM, Construction CO said:

    Case in point; drawings for fire system installation in a building being renovated, identified installation layout above the ceiling.  Ceiling was constructed of sheetrock and upon removal of the ceiling it was identified that there was a significant sized metal beam (support beam) that could not be removed or modified and that the fire system would need to be reconfigured and redesigned due to the metal beam.  Anytime you change a fire system from the original design you must accomplish a redesign as you must re-calculate what the quantity flow will be.  Taking this situation into consideration would it be appropriate under the changes or differing site conditions clauses?  I would see it as a differing site condition, although it could possibly be argued as a being under the changes clause.  I am unable right now to see how the additional work and time required for this would be considered under the defaults clause, yet this is how the inspector viewed it simply because of the extension in the period of performance.  

    Emphasis added. Pursuant to FAR 52.236-2(a)(1), that's a Type I differing site condition:

    Quote

    Subsurface or latent physical conditions at the site which differ materially from those indicated in this contract[.]

    But since, according to the "case in point", a redesign will be necessary, the appropriate clause to use would be the Changes clause, FAR 52.243-4.

    The "case in point" cannot be resolved under the Differing Site Conditions clause, the Suspension of Work clause, or the Default clause, because none of those clauses authorize the CO to make the necessary design changes. Use of the Differing Site Conditions clause is appropriate when a differing site condition will impact the contractor, but not require changes to the design. Since the contractor must perform in accordance with a changed design, and if the change might cause an increase or decrease in the cost of or in the time required for performance, then the contractor might be entitled to an equitable adjustment, including profit---remedies that neither the Suspension of Work clause nor the Default clause provide.

    See? Plain English.

    My issue about researching cases is not whether cases might be useful. They can be very useful in the right hands. The issue is time and know-how. Unless a CO is a lawyer, or otherwise very experienced in finding and analyzing cases, it is better for him or her to start with a secondary source---a hornbook or other treatise, such Administration of Government Contracts or Government Contract Changes---than it is to start researching and citing cases in support of arguments. A good secondary source will provide appropriate case citations and explain the cases.


  20. @Construction CO:

    I recommend against researching and reading cases.

    Look, the plain language of the clauses supports your position about time extensions under the Default clause. You don't need any $&*# cases. Tell those people that if they can't understand the simple English of the clauses to read a book on the subject, like Cibinic, Nash and Nagle or Nash and Feldman.

    Keep in mind, however, that you may not correctly understand the point that they are trying to make. So make sure that you do before you tell them to get lost.

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