Navy_Contracting_4

What does the contract say about payment of the fixed fee?

The rules implementing Section 863 (in FAR 16.505() deal with purchasing services pursuant to multiple award contracts, and address specific requirements for awarding orders under such contracts. They don?t apply to award of basic contracts, so how would they be an impediment to your proposed approach?

1. In my experience, payment is always made after the delivery date. If the contractor doesn't deliver, then he doesn't get paid. Why would you make payment before the contractor delivers? 2. Nothing in the FAR requires the contracting officer to modify the contract to extend the delivery dates, although the "Changes" clause does require the contracting officer to make an equitable adjustment in the delivery schedule if he/she makes a change that causes an increase or decrease in the time required for performance. Perhaps there are details you can share about your specific situation that will provide a clearer understanding of your dilemma.

Have you observed a shift in practice, notwithstanding there having been no change in policy?

If your contract includes FAR 52.246-2, Inspection of Supplies--Fixed-Price, (as opposed to 52.212-4, which explicitly articulates "post-acceptance rights") then, as stated in paragraph (k), "[a]cceptance shall be conclusive, except for latent defects, fraud, gross mistakes amounting to fraud, or as otherwise specifed in the contract." Unless there was an express waiver of contract requirements, or a repeated pattern of practice of accepting non-conforming supplies, then the one-time acceptance would not constructively waive the requirement on future vehicles.

You've been told wrong. Read FAR 16.601, particularly 16.601( c).

If you have convincing evidence that the contractor's certified cost or pricing data were not current, accurate or complete, and you can demonstrate that the government relied on the non-current, inaccurate or incomplete data to its detriment, then the contracting officer could send a letter to the contractor demanding a price reduction pursuant to the clause at FAR 52.215-10. If the contractor does not agree, then, depending on the certainty of your determination, there is always the option of making a unilateral price reduction pursuant to the clause. Of course, the contractor may dispute the price reduction and submit a claim, and then it will be up to the Board of Contract Appeals.

I think any argument that a protest on the ground that the order increases the scope, period, or maximum value of the contract under which the order is issued would no longer be allowed is baseless. If the entire paragraph (e) is no longer in effect, then you?d be back to the way it was before paragraph (e) came into effect, and before that, couldn?t interested parties protest on the ground that the order increased the scope, period, or maximum value of the contract under which the order was issued? So wouldn?t removal of paragraph (e) have no effect on that kind of protest?

How is your concept different from performance-based payments?

And it's not just "encouraging" that can get you in trouble. Knowingly allowing services to be performed without a contract might be construed to be accepting voluntary services, potentially in violation of 31 U.S.C. 1342 ("An officer or employee of the United States Government . . . may not accept voluntary services...")

You can find info on ACRN establishment and use at DFARS 204.7107 and DFARS PGI 204.7107. I can't help you with "CASE."

It's "posse comitatus." Google it.

You should also address reporting requirements into FPDS.

Are you asking about Firm Fixed Price or Fixed Price Incentive? In a firm fixed price contract, any amount underrun becomes profit. If the contract is Fixed Price Incentive, it's different.

I recommend you read FAR 42.002 and Subpart 42.1. Also, it's interesting to note that DFARS 242.002((i) says: "DoD requires reimbursement, at a rate set by the Under Secretary of Defense (Comptroller/Chief Financial Officer), from non-DoD organizations, except for? (A) Quality assurance, contract administration, and audit services provided under a no-charge reciprocal agreement; ( . . .; and (C ) . . . (ii) Departments and agencies may request an exception from the reimbursement policy in paragraph ((i) of this section from the Under Secretary of Defense (Comptroller/Chief Financial Officer). A request must show that an exception is in the best interest of the Government." [emphasis added.] It's possible your agency already has an agreement with DCAA. Asking DCAA is a good idea.

I'm sorry to say the Navy position is likewise vacant at the moment, but when it was filled, I know that both the last two incumbents were happy to field inquiries from personnel in other agencies who lacked LAs. It might be worthwhile calling an LA from another agency.

Paragraph ( c) - including its subparagraphs (1) and (2) - of 52.216-25 deals with unilateral definitization. Subparagraph ( c)(2) says ?To the extent consistent with paragraph ( c)(1) of this section, all clauses, terms, and conditions included in this letter contract shall continue in effect, except those that by their nature apply only to a letter contract.? Wouldn?t you consider 52.216-24 to be a clause ?that by [its] nature appl[ies] only to a letter contract?? If so, this sentence would seem to say that it (52.216-24) would not continue in effect. In my experience, the definitization modification (whether unilateral or bilateral) deletes 52.216-24, since the obligations of the Government are now fully addressed by the terms of the definitized contract.

If your agency awarded an SCA covered contract with no wage determination (WD) attached, and exercised options for additional periods without obtaining and incorporating a new WD, it's apparent that there was a lack of knowledge, experience and expertise in SCA matters. Before taking any further action, I highly recommend you coordinate with your agency labor advisor. A list of Agency Labor Advisors is at: WDOL Listing of Agency Labor Advisors

If there were no wage determinations attached to the original contract, nor later incorporated into the contract, how did the contractor know how much to pay?

Did the contract include the clauses at FAR 52.222-41 and 52.222-43? Has the contractor been forced by the Department of Labor to pay back wages to his employees?

If you exercised the option and fully funded it, then the delivery schedule/period of performance is whatever the contract says it is. Unless you have some limiting language, either in the CR or in agency fiscal guidance, FY 11 funds under a CR are no different than FY 11 funds under a new appropriations act. The Continuing Resolution Extension end date is the date beyond which you may not further obligate FY 11 funds, but if the funds have been already obligated, then continued performance should not be an issue.

RDT&E funds in DoD are available for obligation for 2 years, so FY2010 RDT&E funds are available during FY2010 and FY2011, but some agencies place administrative controls on use of these funds during their second year of availability, so you should work with your comptroller to ensure your intended use is authorized.

Retreadfed, I agree with Vern that the agency's interpretation does not seem right under any contract terms that I know, but rather than appearing confrontational with the CO by "demanding" a decision, I suggest the contractor (1) respectfully decline to sign the proposed contract modification the agency sent, (2) return it to the CO with your explanation of your understanding of the contractual agreement, and (3) continue to perform and bill in accordance with the contract's terms.

Vern has answered the specific questions in your initial post, but doesn't the contract include FAR 52.216-7, Allowable Cost and Payment, and 52.216-10, Incentive Fee? If so, the amount of fee payable should be readily calculable. Add that amount to the allowable costs payable in accordance with 52.216-7 and you have the total amount due. Can't everyone just read the contract? Personally, I've never heard of a "funding overrun" as you describe it.

Vern, Thanks for the explanation. I conclude from this that a request for a price adjustment exceeding $100,000 pursuant to the Changes clause, would not be a "claim," unless and until certified. Would that be corrrect?