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ShaunaMSACM

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About ShaunaMSACM

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    Nashville, Tennessee
  1. What Good Are Bonds?

    Joel, unfortunately it was. I won't name the specific ENDIST, however, because I'm sure they will (if they haven't already) be catching grief from way up the "food chain" because the individual surety has been involved with multiple lawsuits (including one brought by the Army) and was even referenced in a Congressional report. Following is a link to a Engineering News-Record article that gives a good summary about the individual: http://enr.construction.com/business_management/finance/2014/0805-outspoken-individual-surety-files-for-bankruptcy-protection.asp
  2. All, Thank you for your responses. Joel, I am dealing with a particular East Coast ENDIST (via the prime KTR) on this one; 90% of the time I work with the CEHNC. The on-site stored items in question had very long lead times and we were instructed to procure them up front to ensure timely delivery. We are now being told the items won't be needed for quite some time and we simply don't have the cash flow to pay for everything up front to simply obtain title.
  3. What Good Are Bonds?

    Desparado, While trying to initiate a Miller Act claim, my company had the recent "pleasure" of finding out that the surety had filed for bankruptcy! To make matters worse, the surety turned out to be an individual and the agency had failed to verify the surety's assets were secured before accepting the bonds. Talk about an unpleasant surprise!
  4. All, I am aware that FAR 52.232-5 allows the KO to take into consideration materials delivered to the KTR at off-site locations if: consideration is specifically authorized by the contract and the KTR furnishes satisfactory evidence that it has acquired title to such material and that the material will be used to perform the contract. Question for you - do the same requirements apply to materials delivered on-site? Specifically, does the KTR have to provide title to the materials and a paid invoice for said materials to receive a progress payment? Thanks! Shauna
  5. I would like to express my gratitude and sincere appreciation to all of the contributors for taking time out of their very busy schedules to provide assistance and support our community. Personally, I couldn't do what I do without this site--it helped me out of various conundrums more times than I can count! THANK YOU!!!!!
  6. All, As always, your assistance with this matter has been greatly appreciated! Thank you! Shauna
  7. Brief clarification of Post #5 regarding timeline: 1. Government rejected prime's first pay app. 2. The sub revised its portion of the rejected pay application and the prime resubmitted the pay app to the government. 3. The government approved the revised pay application. 4. Trying to figure out what happened so as to avoid the same situation from occurring in the future, the prime did a "deep dive" into the subcontractor charges and discovered the front loading issue. Hope this helps - please let me know if I can provide any further details.
  8. here_2_help and Joel: thank you for your assistance! here_2_help: Yes, the subcontract contains "Pay When Paid" terms. Even if it didn't, however, the subcontractor would still be required to invoice the way the prime is requiring. This is such a huge project that it would be an absolute nightmare for the prime to sort out the sub's charges each month and include them in the pay app correctly so it isn't rejected by the government. Regarding Item 2, the prime didn't know the sub was "front loading" its charges until the government rejected the prime's first pay application and the prime received a more detailed breakdown of charges from the subcontractor. Regarding "demanding prime contractor pay subcontractor well in advance of what the prime can bill the government", the approved schedule of values is broken down into phases. Phase I includes Paving. If you break down Phase I Paving into further detail, it includes paving of Elm and Maple Streets only. Phase II Paving is limited to one street - Main Street. The subcontractor went ahead and bought the materials to pave Main Street for Phase II. Even though the subcontractor knows we can't ask for a progress payment on their behalf for the Main Street materials since we are only allowed to currently invoice for Phase I, the subcontractor wants to be paid for the Main Street Phase II materials right now. Joel: the prime is holding the subcontractor's payment. The prime didn't know about the "front loading" issue until it had already submitted its pay app to the government, which is the reason why the prime issued the withholding notice in accordance with 52.232-27(e). Also, by the time the prime contractor discovered the front loading issue, it was too late - DFAS had already paid the prime contractor. The prime contractor notified the KO how much it intended to withhold from the progress payment and continues to update him on the status of resolving the situation.
  9. Contract Type: Design Build - FFP Scenario: First tier subcontractor to prime contractor refuses to submit its invoices in the schedule of values format required by the prime contract. Background: 1. The prime contractor incorporated the schedule of values invoicing requirement into the subcontract; subcontractor concurred and signed subcontract. 2. Subcontractor attempts to "front load" charges into its invoices and demands prime contractor pay subcontractor well in advance of what prime can bill government for said charges under the required schedule of values. 3. Prime contractor contacts subcontractor to discuss on multiple occasions; in each discussion, subcontractor advises it will not comply with required invoice format. 4. Prime contractor notifies the KO of the situation and its intent to withhold subcontractor payment in accordance with the procedures set forth in 52.232-27(e). 5. Prime contractor issues a formal subcontractor withholding notice conforming to the requirements of 52.232-27(g). 6. In reply, subcontractor notifies prime contractor to "pound sand" and continues in its refusal to submit invoices in the schedule of values format required. 7. Prime contractor notifies KO weekly of status of situation and continues (on a nearly daily basis) in its attempts to get the subcontractor to submit a proper invoice. Question: Is the prime contractor required to submit subsequent subcontractor withholding notices until the situation is resolved or will prime's actions in Item 7 above suffice? If additional notices are required, is there a specific frequency required?
  10. Is the Hill AFB FAR site down?

    I was finally able to get into the site this morning from my office.
  11. It contains 52.232-7 "Payments under Time-and-Material and Labor-Hour Contracts" (FEB 2007). You are right about the government initial payment of the higher rates. I simply included that in my post to express my frustration. Regarding the other items you state are not an issue, I am aware of that as well. Simply included them so the readers get an idea of the "big picture". Also, thank you for your response--it is an honor, sir. Also, read "Time-And-Materials Contract: The Time Has Come For A Long, Hard Look" recently--EXCELLENT writing! I know that regs have changed since you originally wrote it but thought it gave excellent insight into T&M contracts that many readers are never able to get otherwise.
  12. Scenario: Lower-tier subcontractor performing on a DO issued under the restricted suite of an IDIQ MATOC for maintenance and services. The DO contained 2 types of CLINS: 1. FFP (for preventative maintenance) and 2. T&M (for corrective maintenance). Prime contractor (Company A) submitted hourly labor rates to Govt.; the resulting award contained the hourly rates but no details are given regarding whether the rates for each labor category are for the prime or its subs. NOTE: lower-tier sub was not involved with prime contract in any capacity until well after the award. As such, it was unable to participate in the hourly rate discussions/negotiations between the prime and first-tier sub. In addition, the lower-tier sub was not given any information about said discussions/negotiations. First-tier sub to Company A issued subcontract to lower-tier sub for both CLINs. Beforehand, lower-tier sub quoted its GSA FSS contract hourly rates to first-tier sub; the first-tier sub accepted said rates. Lower-tier sub hourly rates accepted by first-tier sub were was much as $14.00/hr higher than those in listed Company A's prime contract. To the best of this writer's knowledge, the rates in Company A's prime contract had not been disclosed to the lower-tier sub prior to it submitting its proposal to, or receiving its subcontract from, the first-tier sub. CAVEAT: the lower-tier sub is also a contract holder under the same MATOC (lower-tier sub's award was in the unrestricted suite) and most likely has the same KO administering its contract as Company A. The lower-tier sub's hourly rates negotiated with (and accepted by) the Govt. on its award are the same as above - its GSA FSS contract hourly rates. The Govt. is definitely aware the lower-tier sub is also performing under Company A's award as a lower-tier sub. Issue: Lower-tier sub performed multiple CLIN 2 corrective maintenance services over several months, during which time it invoiced its labor at the $14.00/hour higher rate. Govt. accepted all invoices and lower-tier sub was paid at the higher rate. During this time, the lower-tier sub is still unaware of Company A's negotiated rates. Out of the blue, the Govt. decides it no longer wants to pay the lower-tier sub's higher rates and directs Company A to pay the lower-tier subs at Company A's lower negotiated rate. Argument: Lower-tier sub is well aware of the regulations governing T&M work and concurs it must abide by the rates in Company A's contract. The lower-tier sub does, however, take issue with the Govt. changing its position "midstream" on the hourly rates. Does the lower-tier sub have any valid arguments to make? If so, what are they?
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