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Posts posted by D3ad3y3

  1. Good question.  The min language specifies "government orders" but also references the PWS language stating orders will primarily come from Contractor2.   The max language only addresses the math to explain how the number was calculated - it doesn't specify whether that comes from gov't direct orders or commercial orders.  That said, I think you're right that the next logical step would be that the max and min should be treated the same - which would indicate a J&A is needed.  I think that's the road we're headed down. 

  2. Alright, thanks for the thoughts re the contract max.  Regarding the other comments, suffice it to say there's a lot of oversight, and the concerns raised in your comments have been considered.  To be fair, its probably hard to understand this without the contracts and specific language in front of you - it is admittedly something of a unique arrangement.   Was just interested to hear thoughts on the contract max.  Thanks!

  3. So, to clarify (hopefully), Contract2 contractor is ordering and paying for supplies from Contract1 with commercial money (not government money, and not money provided by the Government for the purpose of purchasing stock).  Contract2 contractor then stocks a warehouse (wholesale) with the material they ordered.  The government is not under any obligation to purchase the material Contract2 contractor purchases/stocks at this point.  Contract2 contractor is responsible to make its own stocking decisions - the government does not pay for their stocked inventory.  Later, when the government gets retail demands, those demands flow to contractor2, who then ships material to meet those demands.  The government pays them as those individual orders are filled.  At no time during performance has the government actually spent any money under Contract1 - all Contract1 transactions are commercial to commercial transactions - Contractor1 and Contractor2 basically use Contract1 as a BOA. 


    @Vern Edwards - you're correct - if the scenario above is interpreted to mean that the Contract1 maximum is reached, I agree that a J&A would be required to increase the maximum.  Just not sure whether the above scenario results in any actual work under Contract1 that would count towards the maximum.  All government spend occurs under Contract2.  Lawyers here think J&A.  We may end up going that route (and probably will), but I want to challenge them to think about whether its even necessary to do that under these circumstances.  This decision has ramifications to several other contracts.       


    @here_2_help - the customer for Contract1 can be both Contractor2 and the Government.  The difference is that the language of Contract1 indicates that transactions between Contractor1 and Contractor2 are commercial to commercial transactions paid for by Contractor2.  But it doesn't clearly state whether those commercial to commercial transactions should count against the contract maximum.  All transactions to date have been between Contractor1 and Contractor2 - the government has not spent any money directly on Contract1. 


    Appreciate the thoughts!

  4. We've been having an internal debate about (1) whether it is possible to increase the maximum value of a FFP contract using an in scope increase and (2) whether one is even necessary.  Interested to hear your thoughts. 

    Basically, demand was greater than anticipated and we've hit the contract max early.  Sort of.  The kicker here is that this IDIQ contract (we'll call it Contract1) is part of a program where another contractor (Contract2) is authorized to order from Contract1 and gets government's negotiated pricing and delivery.  The Contract2 contractor then stocks the item at their cost and waits for a gov't demand for it.  When a government demand materializes, Contract2 contractor is paid, but not before.  So, technically, the gov't hasn't spent a dime under Contract1, but the Contract2 contractor has ordered sufficient material from Contract1 that the amount spent would reach the maximum on Contract1. 

    No need to change contract duration or any other Ts & Cs.  This is solely about spend and whether there is a need to secure additional money under these conditions. 

    Thoughts? TIA

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