Rodolfo

Good morning, I would need your valuable advice suggestions regarding this existing scenario. An American firm formed a JV with an Italian firm in order to participate in a tender for a MATOC in Italy as it would not have had the requisites to participate (for example SOA certifications which in Italy are certifications that qualify a company to participate in public contracts in categories of works and rankings of amount, both commensurate with the skills and experience that the company has shown to the Certification Body). Keep in mind that all the documentation that had to be sent for evaluation by the government was provided by the Italian company. The American firm only provided the bid bond in the form of a bank letter. The contract was outsourced to the JV. After a few months, the American firm expressed its desire to leave the JV for logistical and commercial reasons; the Italian company, on the other hand, would like to continue with the contract and would be able to provide all the guarantees required by the contract. The Italian firm would like to ask the government for a novation so that the contract is entrusted to it and no longer to the JV as it is about to dissolve. However, the Italian company is not able to clearly understand whether it will have to request an Agreement to recognize contractor's change of name or a Recognition of a successor in interest to Government contracts. The latter would not seem to the Italian firm the right way as the JV does not intend to transfer the contract to a third party but simply to continue the performance as a single entity without the American firm; the request for a change name would seem more logical, ie from the name of the JV to the name of the remaining law, namely the Italian one, which among other things already has other contracts in place with the Italian government. I hope I have explained myself well as English is not my mother tongue. Could someone kindly provide us with some suggestions? Thanks in advance.

He might but the point is this: does the GVT have the right to re-evaluate using new documentation after an award? I know that it can T4C the contract, but not re-evaluate the past performance. Am I wrong?

This is what at the end has happened. No company made a protest to the award to firm A. However, the requiring activity produced additional information about company A adverse past performance information that the KO was not aware of it when he made the award. The KO, based on this additional documentation received AFTER AWARD, has decided to re-evaluated the past performance of firm A from substantial to satisfactory and, being firm A no longer the best value for the Government, has T4C the contract with A. KO justified this stating that the government has the unilateral right right to change the evaluation scores also after the award of a contract and then go to another offeror. KO stated that each offeror, after an award has made to anothe offeror, has the right to discredit the awardee and if what it alleges is true, he, the KO, will terminate also the second award, the third as so on. I never hear of this way to do contracting. Have I missed something since I left the office? I have done many reserches but I cannot find any case similar to this (re-evaluate the scores after award using new documentation not at hand when award was made but provided by somebody else after award). Your opinion? Thanks

First of all, thank you for the replies. The contract was awarded 1 week ago. Firm A has absolutely not defrauded the GVT; she simply chose 5 recent and relevant projects where she had worked very well and was therefore sure of having good references. The RFQ stated that the KO had the right to obtain other information regarding the past performance of the quoters without limiting himself to the projects presented. However, he had the right but no obligation to do so. I am convinced that Company B can make a protest to either the agency or the GAO but what would the GAO or the agency say? The KO did not have the additional information that Company B gave him when he awarded the contract. I’m of the opinion that the GAO or the agency would not re-evaluate the past information assessment but only verify whether the KO has assessed the past performance IAW the terms of the RFQ and based on the material and information in its possession at the time of the award of the contract. But I could be wrong and so I'm asking your opinion on this forum. No KO can know all the past performances of a firm. Each company has its own skeleton inside the wardrobe. So the KO should become an investigator otherwise every company in theory would have the possibility to report the bad past performances of the awardee to the KO or file a protest because the KO failed to consider other information. So doing, it would be a never ending story. A protest after a protest. Am I saying something that makes sense or am I on the wrong track? Thanks again for the help.

Can a KO, after he has awarded a contract to a firm, re-evaluate the firm's past performance based simply on the request of another firm? A service contract has awarded in writing to firm A. The RFQ provided for best value trade off. Past performance was one of the evaluation factors. RFQ requested that quoters provided a minimum of 3 maximum 5 past performance information of contracts similar to the service requested. Company A provided 5 recent and relevant contracts for an amount well above the requested service. Based on the information obtained by the customers of the 5 contracts on how company A had or was performing, the KO gave to company A the maximum score to its past performance factor. After the award, company B wrote to the KO saying that company A should not have got the maximum score because it had performed other similar services in a non satisfactory manner and provided clear and documented evidence of this. Question: The KO was unaware of this additional information at the time of the award. He based his assessment on the information received from the customers of the 5 contracts. Can company B ask and get the KO to re-evaluate the past performance of company A?

Good morning and thank you. "It would appear from your description that the dispute concerns the assessment of liquidated damages and that this has already been filed as an appeal to the ASBCA". This is correct. "Why hasn't the BCA addressed the initial appeal?" First the Government requested an extension to prepare the rule4. Then, Government moved to dismiss the KTR appeal on the ground that it was not timely filed. KTR presented his arguments and is waiting for Board’s decision. "The Mod appears to offset the additional work/costs against the assessed LD's per the KO decision that you appealed". The mod is tricky. The project was completed and accepted on 30 Jan 2012 and the GOVT has withheld from the final invoice the amount due for the liquidated damages. If the intent of the mod was ONLY to settle the KTR's claim as per Contracting Officer's Final Decision dated 22 January 2013, the KTR would not have problem to sign it but it makes also reference to the liquidated damages which are in dispute. KTR is afraid that if he signs the mod as it is, the appeal will be dismissed. KTR maintains that the GOVT should issue two mods: A Bilateral agreement for the additional work with proper statement release. An unilateral mod for the assessment of the liquidated damages awaiting for the BOARD decision. Instead, if the KTR wants the money for the additional work performed he must agree to sign a mod that makes reference to the liquidated damages. KTR would like to submit a separate appeal to have the KO to pay him for the work already performed. His question is: can I appeal before the BOARD because the KO does not want to pay me in accordance with his final decision unless I accept to sign the mod with the assessment of liquidated damages? Thank you again for your assistance

BACKGROUND: On late April 2012, a KTR requested that the KO issued a final decision regarding his claim for additional work and the remission of the liquidated damages that the agency intended to assess. In spite of the KTR’s repeated written requests, the KO failed to issue a decision with a reasonable time (more than 8 months). The KTR then filed a notice of appeal to the ASBCA citing the KO failure to issue a decision. By action of the board, on late January 2013 the KO issued the final decision. With the final decision the KO denied the remission of liquidated damages; however approved the KTR claim in whole. The KTR appealed before the ASBCA the KO’s final decision to assess liquidated damages. As of today, the Board has not taken a decision yet. On late May 2013, the agency e-mailed to the KTR a bilateral modification with the request to return it signed. Block 13c of the modification cited FAR clause 52.233-1 Disputes. The modifications reads as follows [VERBATIM]: “The purpose of this modification is to settle Contractor's claim as per Contracting Officer's Final Decision dated 22 January 2013 regarding additional costs for purchase and installation of the heat recovery units, repair of the HVAC system in building XXX, and reconsideration of the assessment of liquidated damages under Contract no. XXXXXXXXXXXXX” It should be noted that the contract price shown in the modification (i.e., from) had already been deducted of the amount of liquidated damages and that, included in the supplemental agreement, there was a release (disclaimer) which said [VERBATIM]: ....”the Contractor hereby fully releases the Government its officers, agents and employees of and from all liabilities, obligations, claims, appeals and demands, which it now has or may hereafter have arising under or in any way related to this contract”. The KTR kowns that is customary for the government to include release languages in contract modifications (see FAR 43.204 (e)) to avoid subsequent controversies that may result from a supplemental agreement containing an equitable adjustment. However, he does not agree to sign a supplemental agreement that: 1. Makes reference to the liquidated damages that are in dispute. 2. De facto deducts the amount of the disputed liquidated damages from the contract price. The contractor holds that: 1. The language of the modification and of the disclaimer will bar him from pursuing his appeal. 2. The government’s assessment of liquidated damages and his claim are two separate issues; thus, they should not be incorporated into the same modification. 3. The supplemental agreement contains a Contractor's Statement of Release that makes reference to “appeals”. 5. By signing the supplemental agreement as written, de facto he would accept the assessment of liquidated damages. The KTR’s concerns were brought to the attention of the KO but, as of today, nothing has happened. QUESTION: Can the KTR appeal before the BOARD the KO’s failure to honor what he has established to accomplish with his final decision (i.e., pay the KTR’s additional work)?

Good morning gentlemen, I'm assisting an Italian company in the preparation of an appeal against a contracting officer's final decision to assess liquidated damages in the amount of € 28,557.80 (less than $50,000). This is the first time I do this, and I must admit that I have a problem primarily due to the fact that the English is not my mother tongue. Therefore, I kindly ask if someone could answer/clarify the following questions offhandedly whenever possible. The questions refer to the rules of the ASBCA dated 11 May 2011 and the FILING GUIDANCE Rev. 25 July 2012. RULE 1. QUESTION 1 - Can you submit a notice of appeal via electronic mail (asbca.recorder @ mail.mil) or facsimile ((703) 681-8535) or you have to submit it peremptorily via registered mail? QUESTION 2 - If you must submit it by registered mail, in the computation of the 90 calendar days is the date of receipt by the dell'ASBCA that attests or the date of receipt of the Italian post office? RULE 2. QUESTION 1 - Does the notice of appeal only require some information such as the contract number, the department and / or agency involved in the disputes, the decision from which the appeal is taken (i.e., the opposition to the assessment of the liquidated damages), and the amount in dispute (i.e., € 28,557.800)? QUESTION 2 - Can you skip in this phase (i.e., the submission of a notice of appeal) to explain word for word the grounds, attaching supporting documentation, for the company's appeal against the contracting officer's decision (i.e., the assessment of liquidated damages) and do it instead after the notice of docketing of appeal in accordance with the rule 6? RULE 4. QUESTION 1 - Shall documents, submitted by the company in addition to those submitted by the government, be in original and/or contain a notarized statement? QUESTION 2 - Do they have to be submitted by registered mail or can they be also submitted via facsimile or e-mail? RULE 6. QUESTION 1 - Is it in this phase that the company explains word for word the reasons for the appeal to the contracting officer's decision? QUESTION 2 - To strengthen the appeal, can you, in this phase, attach supporting documentation or the latter had to be submitted in accordance with RULE 4 (in other words, you cannot submit any additional document but only explain the grounds for the appeal)? For the moment this is enough for me to proceed. Thank you in advance. Rodolfo

Sorry if I ask these dummy questions. QUESTION 1 - If a contractor appeals a KO’s final decision to the Armed Services Board of Contract Appeals (ASBCA), the consultant's fee is reimbursable in case his appeal is sustained? The consultant must be an attorney or can be anyone? QUESTION 2- If the appeal is denied, shall the contractor reimburse the costs incurred by the government (e.g., the attorney's fee)? Thanks

I agree but the ultimatum, given today, falls due tomorrow. If the Contractor does not accept, he will be required to install the missing outlets. It sounds unbelievable, but it is true. What can he do?

Contractor had to renovate an existing building under a design/build contract. At the completion of the performance, Contracting Officer notified Contractor that he did not meet the standard required by the Scope of Work (corridors must have outlets ever; 6 meters and rooms/offices every 2.5 meters). Since Government had no longer need for the missing outlets, Contractor was notified that the Contracting Officer will deduct from the contract the cost for each outlet missing (44 outlets). Government estimated that the total amount to be deducted was euro 7.800,00. Contractor concurred with the amount. Contracting Officer proposed to swap the amount to be deducted with additional electrical work (in scope modification). According to the Contracting Officer the additional work balanced the work that had to be reduced (increase minus decrease = 0). Contractor rebuted that the additional work was worth more than euro 7,800 and therefore refused to accept the exchange (Contractor has already performed additional work for which is going to submit claim). Contractor stated he was available to perform the additional work but requested an equitable adjustement between the work to be deleted and the work to be added (a few thousands euro). The two parties did not arrive to an agreement. At this point Contracting Officer has given an ultimatum: or the Contractor accepts to perform the additional work at no additional cost (addition – less deletion = 0) or he will be required to install the missing outlets. Of course to install them after the completion of the work will cost more than to perform the additional work at no cost. So the Contractor will be forced to accept the Contracting Officer proposal. What are your thoughts?

No doubt about. KO was informed in writing. Government investigated the site and provided instructions on how to proceed. Two differing site conditions were category I, one category II. Thanks

Thanks for your quick reply. I was afraid to hear what you just said. It makes sense; the mod was bilateral and probably the Government issued it in that knew that otherwise the clause could not be enforced. We have three (3) outstanding differing site conditions and we have proposed to the Government to trade them for a time extension. The amount claimed by us is greater than the amount of L.D the Government will assess; however, we?d prefer to loose some money rather than to look bad. Government stated that it is too late (completion date was 19 Dec 2011). I remember when I was a KO we have issued modifications such this (but maybe we were wrong). I know that only Compt General can make remission of the whole or any part of the damages, but I do not know what prevents an agency from trading claims for L.D.? Do you mind to provide your comment? Thanks

Good evening to everyone. I am writing from Italy because I have a very important question and I am sure somebody will be able to help me. The company I am working for has been awarded a construction contract for the installation of new heating lines. IT IS IMPORTANT TO KNOW THAT THE STATEMENT OF WORK DOES NOT REQUIRE THE REPLACEMENT OF THE EXISTING HEATING LINES BUT ONLY THE INSTALLATION OF NEW LINES. IN OTHER WORDS, THE BARRACKS WILL NOT REMAIN W/OUT HEATING IN CASE OF A DELAY. The contract consists of a basic project and an option project. Each item has its own performance period. The contract contains the liquidated damages clause (FAR 52.211-12) in the amount of Euro 2.104,73 (same amount for both the basic and the option) for each day of delay beyond the contract completion date. The basic project was completed on schedule; however, the firm has been experiencing problems with the option. When it was evident that the option would not have been completed on schedule, the Government issued a bilateral modification to reduce drastically the amount of the liquidated damages (only for the option) from Euro 2.104,73 to Euro 242,50. The KO stated, in writing, that the reduction was due to the fact that also the Government caused delay. However, later the Government extended the completion date under the changes clause w/out explanation. Notwithstanding the extension, the firm missed the completion date (19 Dec 2011) and estimates to complete the option project not earlier than 28 Feb 2012. The Government issued a letter stating that the company from 20 Dec 2011 will work under L.D. In accordance with FAR, liquidated damages are a fixed amount set forth in a contract by an agency to compensate the agency for unexcused delay in the performance of the contract and are established by the Government prior to the issuance of the solicitation. These damages, expressed as a daily amount to be assessed against the contractor for each day of delay beyond the contract completion date, must be a reasonable forecast of the damages the Government will incur for each day of delay and not be in the nature of a penalty, however. If the liquidated damages do not meet this test, then they could be deemed an unenforceable penalty by a court or administrative contract appeals board. We are convinced that the amount set forth in the contract was greatly disproportionate to the presumable actual damages that should have been anticipated and that they erroneously included other ?specific losses?. Therefore, we believe that the readjustment was due to reflect a much more realistic and reasonable forecast of the damages the Government will incur for each day of delay (inspection and superintendence costs only). In fact, as stated above, the new heating lines DO NOT interfere with the existing ones. At present all the buildings are heated by the existing heating lines. I know that to be enforceable, the liquidated damages must be a reasonable forecast of the likely or actual damages if a delay occurs and not disproportionate to the presumed loss or injury to the non-breaching party. I also know that if forecast of damages was unreasonable and excessive, then the courts and boards will consider these damages to be a penalty and, hence, unenforceable. I also know that THE TIME FOR EVALUATING REASONABLENESS OF LIQUIDATED DAMAGES IS THE TIME OF CONTRACT FORMATION AND NOT THE TIME OF BREACH. Here comes the question: IN YOUR OPINION, THE REASONABLENESS OF THE GOVERNMENT'S FORECAST OF LIQUIDATED DAMAGES SHALL BE LOOKED TO THE CIRCUMSTANCES AT THE TIME OF CONTRACT FORMATION (WHICH WAS SEP 2010), OR THE TIME OF THE MODIFICATION WAS ISSUED TO REDUCE THE AMOUNT (WHICH WAS NOV 2011) WHEN THE GOVERNMENT WELL KNEW THAT THE FIRM WAS BEHIND SCHEDULE AND BY NO WAY COULD HAVE COMPLETED THE OPTION PROJECT BY THE REQUIRED COMPLETION DATE? IN OTHER WORDS, IS THE CLAUSE ENFORCEABLE BECAUSE THE GOVERNMENT READJUSTED THE AMOUNT WITH THE MODIFICATION OR IT IS NOT ENFORCEABLE BECAUSE WHEN THE CONTRACT WAS FORMED THE AMOUNT WAS A UNREASONABLE?

Mr. Jacques, thank you very much for your help. You really helped us. There is no doubt that this is a lost battle. Our firm knows the rule of the "Interested Party" very well. In challenges of the evaluation of proposals and the awards of contracts, this generally means an offeror that would potentially be in line for the award if the protest were sustained. The agency does not confute our theory of the unbalanced offer, but its confuting argument is that we are not an interested party to protest the award because we would not be in line for award anyway if our protest were to be sustained. The agency points out that there is one proposal with a total price lower than ours that would be considered for award ahead of us. However, we have found out that we were the third lowest offeror only after having received the redacted version of the Agency's request to summarily dismiss our protest. For this reason, we would like to point out that both the Government and our company could have saved money and time if the Agency would have taken into consideration to meet with us, as per our written request to resolve our concerns at Contracting Officer level through an open and frank discussion. We have reason to believe that also the second lowest offeror, who is an interested party, could not have known that it could have filed a protest claiming that the awardee submitted an unbalanced offer in that the unsuccessful letter issued by the Agency states only that the contract has been awarded to Firm XXXXX for the total award amount of Euro 134.735,00. We believe, for the transparency of the all procurement process, that it would have been better to state that an award had been made for the basic year (Euro 54.760,00) and that the Government had accepted the offer for option year one with the amount of Euro 41.240,00 and option year two with the amount of Euro 38,735.00. This would have allowed an interested party, thus the second lowest offeror, to consider filing a protest due to the unbalanced offer. Notwithstanding the GAO will find us a non Interested Party, we disagree with the Contracting Officer?s Statement dated 3 March 2011 and we would like, in order to avoid further confusion in the future, that GAO provides its comments. In reading the redacted Contracting Officer Statement we find out that he/she evaluated the offers for award purposes by adding the total price for all options to the total price of the basic requirements, therefore the Grand Total of all three years. The Contracting Officer concluded that the acceptance of the most favorable offer XXXXXX (grand total Euro 134.735,00) resulted in a fair and reasonable price for the Government totally ignoring the requirement under FAR 52.212-2( which was incorporated into the RFQ. This means that the Agency, independently if the prices are balanced or unbalanced, makes an award to the offeror who proposes the lowest price. Supposed the lowest offeror had proposed Euro 74.760, Euro 31.240, and Euro 28.735, it would have got the award because, according to the Contracting Officer, its total price was the lowest. We maintain that all offers with separately priced line items or subline items shall be analyzed to determine if the prices are unbalanced. If cost or price analysis techniques indicate that an offer is unbalanced, the Contracting Officer shall: (i) Consider the risks to the Government associated with the unbalanced pricing in determining the competitive range and in making the source selection decision; and (ii) Consider whether award of the contract will result in paying unreasonably high prices for contract performance. The low priced offer is significantly unbalanced, and the redacted award decision does not address at all the risk of unbalanced pricing. Here is the Contracting Officers statement (VERBATIM): 1. The Request For Quotation was evaluated IAW FAR Provision 52.212-2 "EVALUATION- COMMERCIAL ITEMS (JAN 1999)" paragraph (a) "The Government will award a contract resulting from this solicitation to the responsible offeror whose offer conforming to the solicitation will be most advantageous to the Government, price only considered". Furthermore in paragraph ( Options. "The Government will evaluate offers for award purposes by adding the total price for all options to the total price for the basic requirement". Therefore the Contracting Officer considered price only, and evaluated by adding the total price of all options to the basic requirement, therefore a Grand Total of all three years. 2. A comparison of the final prices revealed that the lowest offer Grand Total price for Base plus Two Year Options was ?134,735. 00 proposed by XXXXX. The second lowest Grand Total price for Base plus two Year Options was ?146,198.76 proposed by another offeror. The third lowest Grand Total price for Base plus two Year Options was ?156,327.00 proposed by the protestor. Based on price competition the Contracting Officer concluded that reasonable competition existed and that the acceptance of the most favorable offer XXXXX (Grand Total ?134,735.00), resulted in fair and reasonable price for the Government. AS YOU SEE NO MENTION TO THE UNBALANCED OFFER. By the way, our price for the basic year was lower than the price proposed by the awardee. In any case, thank you very much for having provided your comments. A lost battle, but a learned lesson. Thanks from Italy.