My client has signed an FFP LOE contract with a prime who is on a CP contract. My client always worked previously as an FFP only so they submitted rates for hours to get to a specific deliverable as the LOE. The Prime accepted their rates and put them in with their bid package and won the contract. This is a custom built software solution that requires X amount of time to get to a functional delivery (it is defined as a deliverable, it is produced as a stand-alone piece of the whole deliverable). This is a new contract that they had to move to since their previous contract expired and this is a new prime. The prime has now come to them with a TO finally. Apparently, there were issues on the task order that required a modification, after my client had already been approved to work and working for almost 90 days, and stated in this TO a reduced dollar amount from clients original submission a quote for this work. So the rates they submitted and hours already worked are now too high. The prime is saying they didn't get enough from the government and want my client to sign this task order with the new pricing. What if any recourse does my client have other than not signing and than not being paid?
Client submitted pricing for the work requested under an FFP LOE agreement, they have an executed contract with prime for this work. They now want to reduce price (by actually reducing the hours) because the government didn't give them enough money. My client knows (based upon available information) what was put on the contract so know that the money is there just that the prime wants more money on there end. So Prime now want client to sign this task order agreeing to the new price AFTER they have already performed 2/3's of the work for the 4 month period of the task order.
What are their options? I can clarify if anyone has questions on specific points.