#1 Fan of Guest Vern Edwards

Thank you both for pointing out that FAR reference and for the advice on forms, it's very helpful!

3 hours ago, ji20874 said:

Do you have this in writing?  You haven’t T4D’d yet?  Anticipatory repudiation is a perfect reason for a T4D.  You don’t even need a cure notice if the anticipatory repudiation was clearly communicated — if it was wishy-washy, you could do a cure notice based on what you thought might have been an anticipatory repudiation and let the contractor unequivocally confirm or deny.

FAR 49.402-4(c) allows for a no-cost settlement agreement as a procedure in lieu of termination for default in some situations.

The contractor stated over email that they would like to be relieved from the contract or allowed to resubmit a revised quote and provided more money. @ji20874 I agree and believe my contracting officer is on the same page with you about not wanting to forfeit the leverage and first consider our case for T4D in this situation.

19 hours ago, joel hoffman said:

EDITED:  If your office thinks that  obtaining guotes for small construction acquisitions is a simpler process, then  tailor your solicitation so that both industry and the government know what the legal effect is and what to do with a quote. I think that there needs to be a simple process available to clarify or to bargain with industry if necessary to get it right (mutual understanding) before entering into a contract for a small project. 

@joel hoffman I am eager to take lessons learned from this situation as most of my work now is small dollar construction.  Is there an alternative to obtaining quotes for construction projects under the SAT?  Also, I recently read the thread at FAR 13.106-2 - Discussions and am curious if this is what you mean by "simple process available to clarify or to bargain" with industry to come to a mutual understanding before entering into a small project.

...

Thank you all for the references, lessons learned, and possible solutions; it has really helped my research.  I do appreciate your time and thoughts.  As suggested, the discussion will be continued further with legal and the Contracting Officer to develop the best solution for the government.

@joel hoffman the magnitude of construction was between $100,000 and $250,000.

Yes, I should have mentioned Part 36, this is for construction work procured using SAP - other than commercial.

No performance bond was required, only an alternative form of payment protection (payment bond submitted).

The awardee's quote was considerably less than the government estimate and the responsive next in line quote is considerably higher than the government estimate.

On ‎7‎/‎13‎/‎2019 at 9:49 AM, Neil Roberts said:

I don't know if there is a contract. Did the government offer one and was it accepted in writing? Was work performed? Was there a mistake in fact about a material specification essential to the meaning of the contract? 

Both parties signed the SF1442. No work was performed.  The "mistake" appears to have arose from patent ambiguity in the specifications (as the subcontractor brought it up to the prime without any Government knowledge or input).

On ‎7‎/‎13‎/‎2019 at 12:28 AM, ji20874 said:

You can T4D if the contractor indicates it will not perform the work.  But if the contractor will agree to a no-cost cancellation, you will be saved all the paperwork and headache of a T4D.  So maybe it is a fair trade?  If so, maybe you don't need to punish the contractor.  Your agency comptroller can launder the contract funds so that they can be used for the re-procurement since you're still in the same fiscal year.

Regarding the next-in-line:  Its price is considerably higher than the current contract, okay, but does it compare favorably with the government estimate and/or the other competition?  If so, awarding to the second-in-line, if it will extend the validity of its offer without making other changes, might make good sense.

The contractor refuses to perform the work at the agreed upon price.  I agree with you and others that the no-cost cancellation approach would be gracious and less painful for both parties.  Regarding the next in line: the price offered is considerably higher than the IGE.

On ‎7‎/‎13‎/‎2019 at 1:43 PM, C Culham said:

If in fact a true RFQ package absent FAR 52.212-1, FAR 52.214-7, or 52.215-1 then it would seem that FAR 13.004 applies. 

C Culham, I hadn't considered this before...performance hasn't begun, but would the submission of a payment bond, certificate of insurance, and construction schedule constitute a form of written acceptance? This contract was passed off to me just after award, so inquiring to see if any other written form of acceptance was received. 

On ‎7‎/‎11‎/‎2019 at 2:49 PM, ji20874 said:

 I don’t think the contractor made a mistake, I think it was sloppy.  A subcontractor mistake is not a contractor mistake.  Realizing after award that costs will be higher than it planned is not a mistake — it is poor planning.  The allegation of a subcontractor mistake is not actionable under 14.407-4, and might just be an excuse to cover poor planning.

Do you have a next-in-line quoter ready to do the work?

I am an agreement with your statement jj2084.  Unfortunately, the next in line is considerably higher in price so it's looking like back to the drawing board.

23 hours ago, joel hoffman said:

A mistake in bid often is associated with a math error or transposing numbers.

Yes, when reading through GAO cases it appears that this is the case.  Typically it seems the contractor must show evidence that what they intended to bid was not what they actually bid; which is not the case in this scenario.

A follow-up question...understanding that performance of the contract never actually began (NTP issued but no mobilization), if a no cost cancellation is accepted by the contractor, is it possible/appropriate to document the poor planning and subcontract management of the contractor in PPIRS or something?  In order to properly caution other agencies?

Thank you all for your responses so far!

1 hour ago, ji20874 said:

But first, read FAR 15.508.  You might learn that 14.407-4 has something to say after all.

You're right!  Thanks.

Quote

FAR 15.508 - Discovery of Mistakes.Mistakes in a contractor’s proposal that are disclosed after award shall be processed substantially in accordance with the procedures for mistakes in bids at 14.407-4.

Is failing to do your due diligence as a prime contractor a "mistake" or simply negligence?

1 hour ago, PepeTheFrog said:

#1 Fan of Guest Vern Edwards, can you explain how this contract was awarded...

 

What does that mean?

Awarded on the basis of LPTA with evaluation procedures in accordance with FAR 13.106-2 and 15.101-2. 

1 hour ago, ji20874 said:

Do you have a performance bond?

No, only a form of alternate payment protection.

1 hour ago, Retreadfed said:

If the latter, the contractor has a duty to inquire abut the specs before award. 

This I believe to be true.  Instead, the contractor is only just now asking all these questions after award and after his subk realized his mistake and upped his price.

New to construction contracting and interested to received advice/options for how to proceed in the following situation.

Context: Construction contract competitively awarded using FAR 13 and FAR 15 procedures; LPTA.  Awardee submitted the lowest priced quote, lower also than the IGE.  Prior to award, the KO asked the contractor to verify and confirm that his price was valid and that the firm (and subs) could deliver the requirements under the solicitation for a FFP.  The contractor held that his price was unchanged. The contract is awarded; everyone signs and everyone is happy.

After the pre-con and about a month before performance is to begin, the contractor emails explaining that he made a mistake and realized he quoted too low.  Long story short (through many emails and calls), we learn that the prime contractor relied upon the pricing of a subcontractor whose price was very low and, come to find out, based on a misunderstanding of the specifications. The prime did not do his due diligence to question the sub or review the specs; even though he admitted receiving two other much higher quotes from other potential subs.  After award, the subcontractor pulled out and increased his price to the prime. The prime at that moment realizes that his quote was based on a misunderstanding of the specs.  The prime now claims that our specs are flawed/ambiguous and he cannot perform at the quoted price; wants the Government to mod the contract to increase the price.

A T4D is being considered.  Also looking at FAR 14.407-4 “Mistakes After Award” for some kind of guidance, but it doesn’t really apply since this was not sealed bidding and not sure if what happened can truly be classified as a “mistake”.