Hi! I have a situation where it seems DFAS/ACO/PCO/Contractor have a different expectation of how progress payments should work on this program. I am looking for guidance that could help everyone have the same understanding, or to weave the pieces together. I am the Contractor, small business, awarded a Task Order (which we all refer to as a "contract") under a GSA GWAC, primarily for services and material (aka not Construction). The total value to include all options is $80M. There are multiple CLIN types, mostly FPIF (with FFP for leased space and Cost for travel/materials). There are no "option years" just options for different systems to be built and delivered. These different systems are on their own CLINs, are FPIF and have their own target cost/fee & ceilings which are separate from the other CLINs, and each CLIN has its own period of performance and a requirement for its own DD250. At award, 1 FPIF CLIN for 1 of the deliveries (CLIN 0001) was funded along with some travel funding (Cost CLIN) and 1st period of lease space (FFP).
During this time we submitted progress payment requests - on one 1443, which only included the total for CLIN 0001 - FPIF which is for the delivery of a system. Since we are small and its DoD, we are allowed 90% rate on costs, and received the 90% in payments. (Fee should not be included and was not.)
During this time we submitted cost vouchers for travel - which the payment matched the dollars on the cost voucher.
During this time we submitted an invoice for the FFP facilities - which DFAS witheld 90% of the amount due - to "liquidate" the progress payments being made on CLIN 0001. (Issue #1)
Our funding for the above 3 are all on the same ACRN - which according to DFAS is why they liquidated because they do not look at the CLIN level, only at the ACRN level - unless its specifically called out in the contract that a CLIN is NOT subject to liquidation. Our PCO and ACO did not expect this to happen, the PCO at the time (we have had 4) issued a unilateral modification, but instead of calling out CLINs that were not subject to liquidation, according to the ACO the language used calls out ALL FFP/FPIF CLINS to be eligible for progress payments. We did not need progress payments on the FFP - lease clins as we were billing a pro-rated basis monthly (total/12months). So we are not comfortable with submitting another invoice against our lease CLIN for fear of it being liquidated as the previous one, so is the ACO, which stated DFAS liquidating these will make the amounts of the master progress payment incorrect. I am waiting on the current PCO to weight in on this issue and hopefully issue a modification with the original language we were expecting. Q: Is the PCO even allowed to exclude CLINs from liquidation?
Currently, the other FPIF CLINS have been exercised and funded (again they are for a delivery of a separate system). Each of our FPIF CLINs have a period of performance spanning 3-4 years each, CLIN 0001 which was the first to turn on, has a delivery date of 2019, whereas CLIN 0004 has a delivery date of 2022.
It was our (the contractor's) understanding that each CLIN, since they are severable and separate in our eyes, would each have their own progress payment form. The ACO states to put it on one form. I am hesitant due to the "liquidation" of invoices. I am waiting on our new PCO to weigh in. This is Issue #2.
If we put all CLINs on the same form, as we delivered our systems and earned our incentive fee, if we billed for the incentive fee, wouldn't it be liquidated because we had other CLINs with open progress payments commitments? If so, this scenario means that we would never see any fee earned until 2022 when the final delivery is made - or even later when all the cost audits have been completed.
Is it possible to have different progress payment forms for each of the FPIF CLINs for delivery of a system? If so, would we be able to invoice and receive any incentive fee earned even though the other FPIF CLINs are not yet completed and still receiving progress payments?
The ACO didn't think DFAS would liquidate the invoice for incentive fee as we deliver the different systems, but I do not see any language that states this in fact I see the opposite and reading the liquidation as DFAS would liquidate all other amounts owed.
Is it possible to get the basis or progress payments changed from based on cost to performance based? However, again each CLIN has its own milestones (SSR, PDR, CDR etc.), so we would still have the same question.
If we have to track and perform at the CLIN level how can we get the progress payments to reflect the CLIN level - or is there no such option? I see there is language to allow something similar if the "rate of payment (%'s) are different, but that is not the case for us.
Sorry its such a long post, I hope I included enough information on the situation. Any advise, opinions are welcome. This affects our long term budget so we need to understand completely how our payments are supposed to work or could work and get it documented in a modification/amendment.