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Everything posted by 490

  1. Joel, The CO is no longer affiliated this organization, but we could probably track them down if necessary. The decision was the expected one, and one that I feel is correct given the circumstances. While never working construction contracts, my experience with claims and REAs have always been after the PoP. It may be different under construction contracts if it is a multi-year project. Pursuing any and all measures in those case makes sense. Since this work continued on another contract, and there is new work in the hopper that could go to another contractor, we do not want to ask "Mom" when "Dad" already said no. Additionally, we do not feel wronged by the decision, rocking the boat would not be fruitful or beneficial.
  2. I do agree with the CO. It was always my opinion that we would only be entitled to partial payment. Since this is a fair amount of money, I was hoping I was wrong and was looking for an alternate interpretation.
  3. Today, the CO determined that we are entitled only partial payment for the service provided within the PoP. Thank you to everyone that chimed in and offered their opinions.
  4. ji201874, The primary reason why we cannot carry on as we did before is that the work was previously on concurrent, multi-year TOs on an IDIQ with a 10 year PoP. It would be easy if we could rely on the precedent of the previous contract, but since the contract changed we do not have that precedence to fallback on. This question pertains specifically to this one year, single source bridge contract. The old work and new work are separate contracts. Before of the PoPs on the old contract, this never came up, we could always align the subcontracts with the TOs. You may be right that I am acting irrationally, but not intentionally. Initially, the answer to my question was unclear to me, but through your responses, and the responses of others, I see with more clarity that the best action may be the partial invoice. (pending CO determination of course). When someone provides their thoughts, guidance, or an answer, I want to make sure I understand why that is the answer. I do not mean to pander you or anyone, your time to respond is appreciated and helpful. Learning the why is just as important as the what to me. The dollar amount is not inconsequential to my company, and on top of that, I am risk adverse. Under the old contract, the services were active longer than a year, so we able arrange for co-terminus expiration of the circuits and the TO. The difficulty on this one is that the Government added new work on this one year contract. The IDIQ, and subsequent TOs had more attention paid to them when drafted and did not have this ambiguity. This bridge was put together hastily as the Government did not get the competitive follow-on released on time. Furthermore, the CO that issued and awarded this contracted is no longer affiliated with this Government organization, so their intent cannot be determined.
  5. ji20874 / Retreadfed, 52.232-1 is in the contract, and the Qty is 1 EA (from 0 to 1, by 1). It was asked earlier what was the intent of the parties. No one expected the service on day one. If the contract was for delivering 10 widgets, and I delivered 5 widgets, determining payment would be easy. Under ji20874's point, I would not be able to submit a partial invoice if my contract is for Qty is 1. I think it is unreasonable to believe I could not bill for partial services. It is our belief that the CO will allow partial payment, but the language supports zero payment. Has anyone come across partial payment for a Qty 1 item before?
  6. Vern, This sentence is very informative, and puts my question to bed. My position, internally, has always been submitting a full invoice was incorrect. Despite musings of others, I was never supportive of a full invoice. Internally, others interpreted 16.202-1 as full payment being justified.
  7. Vern, This sentence is very informative, and puts my question to bed. My position, internally, has always been submitting a full invoice was incorrect. Internally, others interpreted 16.202-1 as full payment being justified.
  8. The decision to submit a reduced invoice has always been an option, but admission of failure is not the sticking point. Since this is a fixed price contract, it can be argued that we are entitled to full payment under the FAR. We get into an interpretation issue from there, which is the reason for starting this thread. Under 16.202-1, it states "A firm-fixed-price contract provides for a price that is not subject to any adjustment on the basis of the contractor’s cost experience in performing the contract." As to the parties intent, we have delivered these same services to this customer for nearly a decade, and they are aware of the delay when installing circuits into these regions. No reasonable person or party could or would assume the service would start on the PoP start date. This brings me back to the issue, that if the contract is written one way, but the intent was the other. Which one wins? My experience is the written contract wins. In this case, the written contract is ambiguous, which generally favors the party that did not write the contract. However, that is not always the case. The forum seems to have gravitated to a partial invoice being the right decision, pending a read from the CO. What we want to be certain of is that we are paid what we are owed under the provisions of the contract-regardless of the final amount.
  9. Culham, The payment provisions are defined as monthly, in arrears, after acceptance. Something tells me that may not fully answer your question though.
  10. Holy Moly indeed. This is for a service, and we can only submit invoices once the service is accepted by the Government. The service was not accepted until month six.
  11. Joel, Your input is appreciated. We are waiting to talk to the CO and get their opinion before we decide what to do.
  12. Vern, That is how I felt, but I was the odd man out. However, I have convinced everyone to that we need to get something in writing from the CO before any decision is made. Thank you for your opinion.
  13. My concern is related to an audit of the Government's administration of the contract due to it dollar value.
  14. Joel, When I read the FAR's description for FFP contracts and inclusive of performance incentives, I interpret the wording differently. 16.202 -- Firm-Fixed-Price Contracts. 16.202-1 -- Description. A firm-fixed-price contract provides for a price that is not subject to any adjustment on the basis of the contractor’s cost experience in performing the contract. This contract type places upon the contractor maximum risk and full responsibility for all costs and resulting profit or loss. It provides maximum incentive for the contractor to control costs and perform effectively and imposes a minimum administrative burden upon the contracting parties. The contracting officer may use a firm-fixed-price contract in conjunction with an award-fee incentive (see 16.404) and performance or delivery incentives (see 16.402-2 and 16.402-3) when the award fee or incentive is based solely on factors other than cost. The contract type remains firm-fixed-price when used with these incentives. Please don't think I'm am trying to argue semantics, I am just trying to understand. The last line (bolded and underlined) is taken from the FAR and says it would still be considered FFP. The Government included performance incentives for meeting availability (e.g., the service has no outages longer than a set period of time).
  15. Ji, Our pricing file stated our subcontractors required a commitment of 12 months, but our proposal was not incorporated into the award. Our PM has stated he verbally told the COTR of the issue with the PoP after acceptance of the service, but the contract PoP could not be extended, the Government's reason's are not known, but believe they should have had methods available to them. We should have done more to document our communication and position at that time, but unfortunately we did not. Our belief and intent is clear, the concern is if our intent is enough to withstand a potential audit down the road. The RFP provides no guidance whatsoever on the issue. Given the location of the work, there is no way to deliver 12 months of service in a 12 month PoP. We are awaiting a discussion and read from the CO which will be telling as to the direction we choose. Thank you for your follow-up response.
  16. Joel, Initially I thought the same thing about FFP and incentive fees. When I checked FAR Part 16, subpart 2, it seems the Government can use FFP contracts in conjunctions with performance incentives under 16.402-2. Despite including incentive fees, the contract is still considered FFP. (http://farsite.hill.af.mil/reghtml/regs/far2afmcfars/fardfars/far/16.htm#P66_12044). The Government included 16.402-2 incentives in the contract. I am not the PM, but our PM stated he tried to get the CO to extend the PoP, but the CO stated they were unable to do so. Not being present in those meetings, I do not know the reasons why. Why the six month extension could not be invoked or other common methods not used is not known to me, and with the old CO gone, that information may be lost to history. Your insight and answers are appreciated and certainly in line with my thoughts. Thank you for your time and reply.
  17. I need to ruminate on your point of what the parties intended vice what the Government intended. My concern is as you state, the CO is not the final opinion that matters when it comes to payment. My position was that we should not invoice for the full amount, and pressed for the attorney's read. Should the CO side with us, we will request a written response for our files, and will discuss invoicing at the point. If the CO does not believe we should invoice, we will not likely invoice. Regardless of the decision, I want to understand both sides in case a similar situation comes up in the future and I can apply lessons learned from this.. Your responses are appreciated, thank you.
  18. Don, We did seek the advice of an attorney, who thought invoicing for the full amount was not the safest interpretation. However, he also went on to say it may be possible to invoice for the full amount. For him, the heart of the issue is what the Government intended. Was performance a) to begin to build the required communications capacity, or (b) to actually provide the required communications capacity. The contract is not well written, and this question is not addressed, or mentioned at all in the contract. Seeking the advice of an attorney was not offered in my original posts above because I was looking for opinions of individuals that may have run across this before. Had I stated that we consulted an attorney, I expected the consensus to be listen to the attorney. Last night I read through dozens of threads on this forum looking for similar issues. I frequently saw your name addressing other questions and learned some things about items I was not researching. Given my research, the answer from our attorney, and the CO's uncertainty, I guess I should feel better about not having a firm answer myself. There is not likely a clear answer here given the ambiguity of the contract, and what it may ultimately result is us thoroughly documenting our decision and rationale for inclusion into the program folder for audit purposes.
  19. A question has been posed to the CO. He is unsure himself, but is looking into the matter. A week prior to the end of the PoP, the previous CO rotated out and he was assigned. My concern is that if a CO approves an invoice, it does not necessarily mean the costs should have been paid. If that were the cause, an auditors job would be pretty easy. Under 16.202-1, it states "A firm-fixed-price contract provides for a price that is not subject to any adjustment on the basis of the contractor’s cost experience in performing the contract." My question pertains to the interpretation of this clause as it pertains to my charges. While I thank you for your replies, I am looking for opinions on this matter given the information provided beyond asking the CO.
  20. My question is not understanding my contract, it is regards to invoicing. The Government ideally wanted the service for the full twelve months, but there is no way to activate the service on the first day of the PoP. We can submit the invoice, and the COTR and CO may approve the invoice and we may be paid. However, that does not eliminate an auditor coming through a few years from now and disagreeing with our position and requesting funds back. Therein lies the heart of my question. Allow me to boil down the question to a simplified scenario and question. The Government issued us a 12 month FPIF contract to install Internet access at one of their buildings for 12 months. Because this building was in a war zone, the service was not activated and accepted until month six. That means for only six months of the 12 month PoP did the Government have their service. Am I entitled to invoice the Government for 12 months of service even though service was only provided for six months of that? Reading the FAR for Fixed Priced services suggests that I can, especially given that my contract provides no requirement precluding this. Is this the opinion of other forum members as well?
  21. We are a telecommunications provider to the US Government and provide terrestrial data circuits to remote, and sometimes hostile, regions in the world. Under a 12-month contract, the Government requested a proposal for 12 months of service. The circuit is not considered accepted and billable until the Government performs its testing IAW the acceptance criteria. Given the regions we deliver service to, it is normal for circuit activation and testing to take three or more months from execution of a subcontract agreement to the activation and testing of the circuit. The salient points are: 1. The Government contracted for a terrestrial data circuit with a certain number of Megabits per second (Mbps) at a certain location specified in the SOW. 2. The period of performance was 5/1/15 – 4/30/16. 3. In Section B, the Unit specified was “EA,” and the quantity is “From 0.0000” “By 1.0000” to “To 1.0000” 4. The contract type was fixed price incentive in accordance with FAR Part 16.202. 5. We provided the Mbps to the locations specified in the contract beginning in November 2015. There are opinions internally whether we can bill the full amount based on service being provided for twelve months, even though the service was only accepted at month six or not. Terrestrial carriers (e.g. Verizon, Level3, etc.) typically require a 12 month commitment, so even though this firm price, severable service, extends beyond the PoP we will be billed for the full twelve months. The stronger and most likely reading of the contract is that the full amount of the annual service should not be charged unless the service was provided for the full 12-month period. However, reading the FAR suggests we may be able to bill for 12 months of service. Nonetheless, based on my experience with post hoc reviews by stakeholders OTHER THAN the contracting officer (such as inspectors general), a pro rated invoicing approach rather than invoicing the full amount, may be the correct interpretation. The contract does not state if it contemplated “immediate” commencement of performance, it is notable that the documents clearly provide that the period of performance was to be 5/1/15-4/30/16, which is exactly one year. (clause 152.211-705). In addition, the Statement of Work provides that the period of performance was to be “12 months from contract award.” Whether or not it is of note, there is no feasible way for service to commence immediately after order, and we are not billed by our subcontractor until the circuit is tested and accepted by the Government. The question then becomes whether “performance” in this context means (a) to begin to build the required communications capacity, or (b) to actually provide the required communications capacity. If “performance” requires only working on the development of the promised capacity, as opposed to actually providing the promised capacity as a service, then it appears that the fixed fee would have been owed. The contract does not offer any indication as to what it intended. I would also note that nothing in the contract appears to require a pro rating of the price to reflect the timing of the in-service dates (or acceptance dates). Nonetheless, there does not appear to be any language in the contract indicating that the customer can be charged for anything other than an operable network service that meets all of the speed and other technical parameters, and that this service is subject to a fixed price for a full 12-month service period. The task order has ended, but there is some discussion if we are entitled to invoice and be paid the fixed price established in the contract. The incentive monies are secondary, and will be determined and paid in accordance with the terms of the contract. The task order has ended, but there is some discussion if we are entitled to invoice and be paid the fixed price established in the contract. The incentive monies are secondary, and will be determined and paid in accordance with the terms of the contract. As a follow-on question: The Government awarded a single source follow-on contract for this service to begin 1 May 2016 – 30 April 2017. If the guidance is that we can bill for the full twelve months, should there be concern about billing, effectively, twice for the same service (trailing six months after PoP end, and first six months of follow-on) even though the same service is being provided under a different contract?
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