Boomer635

As you stated, the Code of Ethics appears to hinge on some form of monetary gain, directly or indirectly, real or perceived. I will tread cautiously and will send an email to the contracting officer, without our inspection concerns, that makes the gov aware that there may be a perceived COI. I am not going to mention that a gov employee may, or may not, have an axe to grind, as it probably isn't pertinent, nor can I prove it. If I am lucky, maybe the contracting officer or agency ethics counselor will connect some dots that I don't see and help mitigate the appearance of a COI. Joel, Retreadfed and Bosgood, I thank each of you for your incite on this issue.

I understand that when I left the government, I had a "cooling off" period of two years before I could actively pursue work from the program I used to be on, and a ban on any contracts that I worked on as a gov employee. However, I am not seeing something similar under the DoD code of ethics for the other way around.... when a contractor goes to the Government. The sticking point I also have is that a 1099 employee is technically an independent contractor (i.e., subcontractor) and does a code of ethics apply to them as it is a quasi-employer/employee relationship. I don't want to take my concerns to the contracting officer, if a COI is not supported, but my team feels strongly that the inspector is not impartial and may hold animosity towards our company from the previous relationship.

The person was a Site Safety and Health Officer (SSHO) responsible for being on site during all repairs. The individual now performs QA for the agency. This individual now inspects the work for the same personnel he used to support on the contractor side. I am hearing from the field that the great relationship we historically had with the QA, may not be as positive as it had been previously, and most inspection comments provided by this person are not supported by the scope, specs, etc. When I read the DoD Code of Ethics for COI it appears to revolve around actual or the appearance of some financial gain, which would not be the case here. We have an issue that may be real or the perception of an impartiality issue.

We hired an Independent Contractor, 1099 Employee, for a key personnel position on one of our contracts. The individual worked for a limited time and sought employment with us as a W2 employee, but we did not hire and shortly cut ties altogether with this person and found a replacement. The individual has since been hired by the Federal Government in a key inspection position on our project. I believe there is a conflict of interest here; however, as this was a 1099 employee, I am not sure. Your thoughts would be appreciated, before I bring this up to the contracting officer.

When demobilizing, the Government directed us to leave the boxes/plates in place and CO would cover the cost when he/she received additional funding and executed the mod for the additional work. It was the government that stated we could not bill for the boxes/plates as it would have to be included in the future mod. However, there is still sufficient funding left to commission the new line and demo the old line.

Mr. Hoffman, Thank you for your response. I have been directed by my company to assist in this matter and have not had all the facts as timely as I have needed them; however, as I continue to pose questions and review project communications the issue is becoming more clear. The old requirement involved installing a new pipe line then demolishing the old. The Government discovered that the old line still provided service to the General's quarters and the local base fast food establishment. The new line does not. The Government completely missed it. The Gov did not issue a suspension of work in writing, but did through verbal communication. The new line was completed two years ago (without commissiong), but we could not perform demo of old line. We informed the Gov of delay on their change order decision and then proceeded to demobilize as it was costing us money. The Gov demanded we leave all trench boxes and steel plates in place. Two years have passed and the Gov is now wanting to negotiate the quote we provided in 2019. We have been unable to submit billing for our subcontractor and trench box/plate materials as they are not in the current TO contract. The Gov is now negotiating down to the smallest detail on the cost of every feature of the new work (taps), to the point we have determined we will lose money. The contracting officer has even stated that they are only willing to pay for our heavy equipment (subcontractor owned) when the equipment is actually running... not turned off. He/She also stated that our out-of-town sub should hire local equipment operators to operate his equipment keep from paying per diem. He prefers to use his own heavy equip operators.

We have provided an updated remobilization schedule based on our subcontractors availability, but have not provided a schedule to perform the new work. We have submitted an REA for the costs incurred during the Government's delay. Although not onsite, we do participate in all Gov COR meetings and provide updates and reporting as directed by the original TO contract. The Gov has pushed back on the hours submitted that our senior leadership has completed (i.e., Program Manager, Corporate Safety Officer, etc...) as the Gov states that these hours are to be applied to OH. However, I believe that once the TO POP ended these labor category hours are no longer indirect, but direct costs to this project. Our original FFP was based on the original lump sum pricing that included OH for that POP period, nothing beyond that.

As a contractor I consider this new work, which is out of scope. Although similar in nature, it is not in the original TO contract, drawings or scope, or schedule. However a contracting officer, pushed for time, may regard this as in-scope, which I believe is what's happening here. I'm sure the changes clause will be used and I also know the CO is given wide latitude in their business judgement. I will not pursue this above the COs head as I do not want to kill a relationship. However, I don't want to be held over a barrel and forced to accept without reasonable consideration. I'm seeking more leverage on this issue as I negotiate. I appreciate the LAW citation you offered, Restatement (Second) of Contracts § 39. This is very helpful. As a contract specialist when preparing my documentation for approval, it was always impressed upon me by legal to make sure my verbiage in certain mods stated, "This is not new work, but the continuation of existing work." It has become a habit of mine to interchange "out-of-scope" & "new work". I will be more specific on this forum in the future. Thank you.

Mr. Edwards, Thank you for educating me on how the Restatement (Second) of Contracts § 39 applies to my situation and I will apply it in the future. I do read the FAR extensively, supplements, case law, online articles and WIFCON to improve my contracting skills. However, learning from experience is certainly more interesting. Thank you for your patience.

ji20874, I appreciate your response. I am not intentionally skirting a response to your question. The government did not direct us to demobilize. However, we did provide them notice of delay two years ago stating that if we did not hear back regarding the RFPs by a specified date we would be demobilizing. We are not on site. Our trailer is on site but we do not occupy it. Although we are substantially complete, we do have some site work to complete from the original scope. Our work is underground, so we left our trench boxes and steel plates in place and a subcontractor insures they are maintained. That is the extent of site work. I have learned, and unbeknownst to my contracting officer until recently, that one of the modification requirements intended for us, has already been executed through another contract to another contractor and is complete. This was performed through another contracting office. They tied in to our work to complete this.

Mr. Edwards, Two years ago, we were enthused to accept additional work; however, after two years and the Govts low counter offer we are concerned we will lose money. Yes, we have let the offer remain open for two years. Correct, the new work is similar work, but was not in the original scope. It is possible had the Govt anticipated this work that they may have included it in the original scope. If we cannot equitably agree on a price, I would like to remove the offer from the table. In regard to the CO threatening unilateral action, I am not familiar with what authority he/she would use. I was hoping that the expiration of the TO would provide me leverage to leave the table if a reasonable price cannot be negotiated. Based on information I have provided, is this "new work"? Due to the work being similar in nature does it preclude it from being deemed "new"? It is not in the original scope, nor was it anticipated. I believe in consenting to perform the "change order" on the Government's terms it would put our company in a difficult position. Yes, the Govt can issue a new TO for this requirement. I believe it would need to be competed within the MATOC pool. I believe I can negotiate this mod effectively if I am confident the CO cannot issue this mod unilaterally. This I believe hinges on the definition of "new work". Thank you for your help.

ji20874, Thank you for your reply. I describe the additional work as "new", as it was not in the original scope, but the work is similar to the original work. it is quite possible had the Govt anticipated this additional work in advance it could have been included within the original scope. To be more specific, we installed a pipeline and the Govt wants us to add taps off of this line to facilities that are not in the original scope. I have not exhausted all negotiation acumen. I hope to have more based on recommendations here. Are you prepared to challenge the validity of the unilateral modification as outside the scope of your task order? Yes, if necessary, but only if I determine it is truly out of scope. No, I am not willing to file a claim. I believe the CO will use the Changes Clause and deem this work in scope. There remains a small portion of the work to be completed from the original scope. We are paid to date on the original TO scope, but not the additional time invested over the past two years. We remained on site to keep a presence as our project is not complete. The Govt did not suspend work, or issue a stop work. We demobilized as a business decision to hold costs to a minimum. During the 2 year delay, our company did participate in all project conference calls with the Gov COR and provided all reporting as required by the original TO, although the POP end date had passed. We did not abandon the job. We have submitted an REA for the costs incurred; however, the GOV states that our direct time by senior leadership oversight during this time period is our overhead. I contend that since the POP expired, our senior leadership time is a direct cost and no longer indirect.

Retreadfed, Thank you for your response. Based on the letter from the CO, an REA is the route the Govt wishes us to pursue; however, after two years of waiting I do not believe there is an urgency that would require us to begin work and negotiate afterwards.

All, thank you for your insight and help in advance. I am a previous Government contract specialist working for industry now, and although I understand great deference and latitude is provided a contracting officer in his/her decisions, I am not fully knowledgeable of how far this deference extends and if I have any recourse in my present situation. Our company was awarded a TO construction project three years ago under a parent IDIQ contract. We substantially completed the TO project two years ago, but we did not perform closeout as the Government initiated a couple contract mods for new work, similar in scope, to be added to the TO. We submitted proposals for each requested modification. We waited for an extended period of time on a decision that didn't come before notifying the contracting officer that we had to demobilize. We left our trailer on site and implemented protective measures to protect our work. The Task Order POP expired after we demobilized. Two years have passed since TO expiration. We have been paying a subcontractor to maintain the protective measures for two years. The parent IDIQ contract has not expired. The Government has recently reached out to us and is ready to execute the mods. However, based on the Government's counter offer this will be a losing proposition for us. The contracting officer has notified us that he/she will execute a unilateral mod for this new work if we don't sign the mod. We would like to recoup our costs for protecting the site for the past two years, but this is not incorporated into the mod (future mod promised). Until now, we have had a good relationship with the Government team and would enjoy completing this new work, but we can't afford the anticipated loss. Can the Govt unilaterally execute a mod for new work on an expired TO? I respectfully request any advice that you can provide. Respectfully, Boomer 635

ji20874, Maybe it doesn't matter what the FAR says. (1) There is no requirement within the contract stating that this is required. (2) There is little profit in this modification; however, we want to be responsive to the Government and receive and a good CPAR in the end. Besides, I am sure we would receive a unilateral change order should we not comply.

Background: Recently awarded competitive FFP task order for fuels system repair project. In anticipation of an upcoming government initiated contract modification, the Contracting Officer (CO) has requested we submit a completed NAVFAC 4330/43 Form (Oct 2011), HOOH, FOOH, Executive compensation, Employee Fringe and additional documentation. We have received the modification scope of work and we estimate the threshold value to be approx. $150K, which is less than the NDAA 2018 increased SAT threshold of $250K and significantly lower than the current TINA threshold of $2M. I understand that the CO is not requesting this information be certified; however, In my review of the FAR, DFARS and PGI, the guidance I find directs the CO to use price analysis in lieu of cost analysis. Specifically, FAR 15.404-1(a)(2) -- "Price analysis shall be used when certified cost or pricing data are not required (see paragraph (b) of this subsection and 15.404-3)". Paragraph (b)(1) "Price analysis is the process of examining and evaluating a proposed price without evaluating its separate cost elements and proposed profit..." . Further reading in DFARS, PGI and DoD Guidebook for Acquiring Commercial Items (Jan 2018), the guidance offered goes into detail of price analysis techniques available to the acquisition team for determining price reasonableness. I talked to the CO and informed her that we could quickly negotiate a reasonable price on the anticipated change order by negotiating our labor category mix, labor hours and materials, but the process the CO was requesting was going to place undue burden and hours on our company to comply. Her argument is that this modification places us in a sole-source environment and the CO is required to perform a cost analysis. When I recommended price analysis, the CO said it could only be performed under competition and that I was misinterpreting the FAR. The CO also said NAVFAC had more strict guidance on the subject. Am I misinterpreting my FAR research and would I be out of line to ask where to locate the more strict NAVFAC guidance? Thank you for your help. Boomer635