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When an agency intends to exercise an option (usual authority 52.217-9; 30 days) and for various financial, operational, etc. concerns the incumbent contractor informs the agency that the incumbent contractor does not desire to continue performance during the upcoming option period; is that a termination for convenience, termination for default or does the agency just simply not exercise the option and begin the acquisition cycle for a new solicitation? Has anyone experienced this scenario and what are some of the applicable notification requirements/regulations/parameters for an incumbent contractor electing to decline/not accept/reject/not perform (not sure the correct verb to use there) a pre-priced option period? Thanks in advance, Additional Context: DOD, Service Contract
Reaching back into a pool of competitive offers for a second award from that pool is permissible after the first award is terminated for default (GAO bid protest decision Maersk Line, B-410445; B-410445.2, December 29, 2014) -- this is rather commonly done. The Court of Federal Claims allowed this reach back (instead of a new competition) after the first award was terminated for convenience (Coastal Environmental Group, No. 13-71C, August 13, 2014) -- this is probably done only rarely. My contracting office is thinking of drafting a provision for use in solicitations for service contracts to put offerors on notice that we may may want to exercise this reach back flexibility (instead of a new competition) if we terminate the first awarded contract for default or convenience, or otherwise choose not to exercise an option, within 15 months of the date of the first award. One might say that we already have this flexibility even if we're silent (at least for terminations), but we have no problem with being transparent and providing a notice. I'm interested in any thoughts on this approach from the WIFCON community. Here's the draft of our provision-- AWARD OF A REPROCUREMENT CONTRACT (a) The Government intends to make one contract award resulting from this solicitation to the offeror that provides the best value to the Government. At any time within fifteen months after award of that contract (the first contract), the Government may award a reprocurement contract to another offeror (based on the evaluation conducted for award of the first contract) if the Government— (1) terminates the first contract; or (2) does not exercise a performance period option under the first contract. (b) Award without discussions. If an identification of a second-ranked offeror was made for award of the first contract, the contracting officer may rely on that ranking to select the offeror to be awarded the reprocurement contract. If a ranking of offerors was not made, the selecting authority may re-visit the evaluation results and select the best value offeror. In either case, if the period for acceptance of offers has ended and the prospective awardee does not agree to extend its offer acceptance period, another offeror may be selected. (c) Award with discussions. The contracting officer may establish a competitive range of the most highly rated proposals based on the evaluation that supported the first contract award. The procedures of FAR 15.306 and 15.307 will apply. The offeror’s final proposal revision shall specify the period for acceptance of its offer.
I have a situation with a recently awarded multiple award contract. This award was made on the basis of lowest price, technically acceptable and there were a few technically acceptable offerors that did not receive the award due to price. Three days after the awards were fully executed, one of the awardees stated that they could not do business with our agency because a few of their clients who were adverse to agency would not sign a waiver for them to work with the Agency. In the solicitation, there are disclosure requirements for the offerors regarding organizational conflict of interest and the offeror is required to certify whether it is aware or not aware of any potential organizational conflict of interest and the disclosure statement shall describe how any such conflict can be avoided, neutralized, or mitigated. The awardee did state in their proposal that they did represent clients that were adverse to the Agency, but did not believe such representation would preclude them from representation of the Authority and if given the opportunity, they would obtain waivers from these clients. I sent the contract to them to review, sign and send back to me to fully execute and gave them three days to do so, in that time, this awardee made no mention of the inability to obtain waivers from their adverse clients. So, when they signed the contract, they signed it knowing they had not obtained the waivers as they disclosed they would need to do in order to avoid, mitigate or neutralize organizational conflict of interest. So, my question is, can this contract be considered void ab initio? I have found a few GAO cases that discusses void ab initio. They are from the 70s and 80s and the scenarios aren’t necessary exactly the same, but each have stated the position that once a contract comes into existence, even if improperly awarded, it should not be canceled, that is, regarded as void ab initio, unless the illegality of the award is “plain” or “palpable.” As stated in another GAO case, Warren Brothers Roads Company v. US, the test of plainly or palpably illegal award is whether the award was made contrary to statute or regulation because of some action or statement by the contractor was on direct notice that the procedures being followed were inconsistent with statutory or regulatory requirements. If the test is not met, a contract may not be canceled, but can only be terminated for the convenience of the Government. Would the awardee knowingly signing a contract when their organizational conflict of interest not being mitigated, neutralized or avoided constitute as passing the test? Thanks in advance for your help!
CPFF, completion type contract for R&D. Contract contains FAR 52.232-20. Effort includes a prototype as final deliverable, a demonstration of that prototype, and several data deliverables along the way (including reports). During performance, contractor was months late on delivering several important reports. The contractor does not dispute this fact, but argues that it gave its best effort overall under the contract. Oversight was not as thorough as it should have been, but the COR asked the contractor for the missing reports several times during performance. The contracting officer was not made aware of the late deliveries until one month before the contract expired; as a consequence, perhaps some good opportunities to issue show cause notices were missed. The contracting officer wants consideration for the late deliveries, and has explained his position to the contractor in detail. Why relax the delivery schedule for nothing in return? The contractor will absolutely not provide any form of consideration. Despite being late, all deliverables have been received except for the demonstration. The demonstration is scheduled for two weeks after contract expiration. As the contracting officer, you're considering an extension to allow the demonstration to take place. You'd prefer to formalize the consideration in this modification, but again, the contractor absolutely refuses to provide any. What contractual remedies are available to you? Note: Termination will not accomplish anything for you, because the contract is near completion and you still want to receive the upcoming demonstration. You just want some consideration.