Don Mansfield

http://www.wifcon.com/discussion/index.php?/blog/6/entry-1897-describing-contract-type-watch-what-you-say/

It sounds like you are looking for a way to obligate funds right away and order services later. Let me ask you this--can you commit to ordering a minimum amount of unscheduled repair upon contract award? If so, then awarding a contract with a guaranteed minimum would allow you to obligate funds upon award (to cover the guaranteed minimum) and allow you to order unscheduled maintenance up to the guaranteed minimum as it occurs (I think you would have to order the services by the end of the fiscal year to comply with the Bona Fide Needs rule, however). Requirements contracts do not typically guarantee a minimum, but I don't know why they couldn't.

Well, I suggest you find that out.

By "order", do you mean purchase order (from the open market) or delivery order (under an indefinite delivery contract)? If you mean purchase order, did the order contain FAR 52.212-4 or FAR 52.229-3? If you mean delivery order, does the indefinite delivery contract contain FAR 52.212-4 or FAR 52.229-3?

You're right about the threshold. As far as interpreting the meaning of FAR 19.702( b )(4), we need to begin with what it says. A literal interpretation does not support the position that "within the general scope of the contract" qualifies "modifications to contracts", but "that do not contain the clause at 52.219-8" qualifies the contract being modified. The next question we need to ask--is there any reason to believe that FAR 19.702( b )(4) does not mean what it says? I don't know of any. Maybe someone in the forum knows of a reason.

If I understand him correctly, I think ji20874 has a novel interpretation of FAR 19.702( b )(4). Here's the language: I originally interpreted this to mean that, for the exception to apply, the contract modification had to be within the scope of the contract and the contract being modified had to NOT contain FAR 52.219-8. However, if you examine the sentence structure, that's not what it says. Both "within the general scope of the contract" and "that do not contain the clause at 52.219-8" qualify "modifications to contracts." A literal interpretation would be that, for the exception to apply, the contract modification would have to be within the general scope of the contract AND the contract modification would have to not include FAR 52.219-8. Sloppy writing? Maybe. But it says what it says. I encourage you to read it more closely. Forget how you interpreted it in the past and what your practice has been.

I'm not following. Here's what FAR 19.702( b )(4) says: Are you saying that the exception would apply because the contract, rather than the contract modification, contains FAR 52.219-8?

I just finished reading the Electronic Sys. USA, Inc., decision. In that case, the Government mistakenly put the equivalent of FAR 52.222-44 in a contract with options and was trying to argue that the equivalent of FAR 52.222-43 should be read in and used to price the unpriced option. If that had happened, the contractor would not have been due an increase. The board said that it wouldn't have made a difference if the correct clause were used:

"Agile contracting"? I sense a new fad. Just wait til the policymakers hear someone speak those words.

Carl, First, FAR 15.201(f) doesn't require an amendment--it requires public disclosure of "specific information about a proposed acquisition that would be necessary for the preparation of proposals" if such information were disclosed to one or more potential offerors. Second, suppose the Govt. issued an RFP that did not prohibit multiple offers and an offeror asked if he could submit multiple offers. If the CO's response was that the RFP did not prohibit multiple offers (something apparent from the RFP), do you think the CO would run afoul of FAR 15.201(f) if he/she did not publicly disclose his/her answer?

Why would an amendment be necessary to answer the question? Why can't HoosierDaddy2002 just tell the firm that the RFP does not prohibit multiple offers? That would be a fact, not an interpretation.

And when you're done reading the memo, you can see FAR 6.001( e ).

You may preclude multiple offers by including a provision in the solicitation prohibiting more than one offer, e.g., Dale Stevens Constr., B-242234, 91-1 CPD ¶ 354. FAR 52.215-1 does not contain such a prohibition, so you will have to add it. You may also allow multiple conforming offers, even if the RFP is silent on the issue. See Educational Media, Inc., B-225457.2, 87-1 CPD ¶ 498. Instead of trying to figure out what the prospective offeror meant by "multiple offer", why don't you ask them? Did he mean i) multiple conforming offers or ii) multiple offers where one or more comform with the RFP and one or more don't? As far as what to do in your situation, you'll have to think it through and decide. If you ask me, I think your evaluation criteria invites this sort of offeror behavior.

What do you mean by "DCAA compliant costing submission"? Does that mean it has to be in the format of FAR Table 15-2?

This morning I read two different threads in the Wifcon forum. In the first thread, the discussion centered on late Government payments. (See “Significant Delays in voucher review/approval”). Some of the participants shared stories of how the Government does not consistently respect contractual payment due dates. Because some contractors are reluctant to enforce their rights under the payment clauses of their contracts, the Government continues to take advantage of them. One poster put it this way: I was embarrassed for the Government after reading this thread. Then, I read the following advice (from a different poster) in a thread dealing with how the limitation on subcontracting clause is applied (see "Small bus Set Aside 50%, can pass part of that to another Small?"): The underlying message: “it’s ok to take advantage of the fact that the government does not enforce this right under the contract.” After reading this, it became clear that Government personnel really aren’t that different than contractor personnel. On both sides, there will be those that respect the rights of the other party under the contract and those whose behavior is guided by what they can get away with. I think we should all strive to be included in the former group. Those in the latter group have little right to cry foul when they find themselves on the opposite sides of a contract.

I don't think it would necessarily void ab initio. I think that it would have to be proven that the illegal term went to the heart of the deal. Otherwise, I think a court could read an illegal term out of the contract and keep the rest intact.

I misunderstood your original post. Now I get it. The option is unpriced. It would have been nice to have FAR 52.217-8 in the contract, but you have FAR 52.217-9. There is a discussion in Formation of Government Contracts, Fourth Edition, Chapter 9, on "soft options.". It refers to a number of cases dealing with performance under unpriced options, including Electronic Sys. USA, Inc., ASBCA 26063, 82-1 BCA P 15,521, where the board held that performance of work in accordance with the Government's exercise of an unpriced option is compensable as a constructive change. I did not read the case. You may want to start your research there.

I know. My point was that you can get to the formula without resorting to extrinsic evidence. Ask an attorney.

In DoD, the CO would only be allowed to obligate 50% of the not-to-exceed amount, which may or may not be equal to the estimated amount of the change. From DFARS: Note that this policy applies to unpriced change orders exceeding $5 million.

Vern, My argument would be that 1) the contracting officer did not have the authority to agree to a CPPC arrangement, so the Government cannot be bound, and 2) the court can't enforce an illegal contract term. Back to the contract clause, I don't think that you need to look outside the contract to conclude that "applying" at FAR 52.216-16( d )(2) means adding. This is because the contract specifies a target price, which is the sum of the target cost and the target profit. The subparagraph states: By showing target price as the sum of target cost and target profit, it is clear that "the adjustment" referred to in ( d )(2)(i) is additive. Since ( d )(2)(ii) and (iii) use the same terminology (i.e., "the adjustment"), and there is no reason to believe that the meaning of "the adjustment" is different when used in ( d )(2)(ii) and (d)(2)(iii), then the only logical conclusion is that it means the same thing. As such, the formula: Total Price = Total Cost + (Target Profit - (100% x (Total Cost - Target Cost))) can be logically deduced from the contract.

Why wouldn't it be (2)? In other words, doesn't FAR 52.222-43 already cover this?

Vern, If the correct formula were "x = a - (b - c)", wouldn't you have a CPPC arrangement for costs in excess of the target price? Think about it. Once c gets bigger than b, an extra dollar of cost results in an extra dollar of profit (i.e., profit would be earned at 100% of contract cost).

If you comply with FAR 43.105, then I don't see how you could have an ADA violation.

if the cost exceeds the target, this is no different than a firm-fixed-price contract for $67 million. Plug in anything you want into the formula and you will get $67 million. The ceiling is meaningless.

If you are asking about my hypothetical, assume the contractor did not provide the notification.