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Hello WIFCON! Would love some input here from any knowledgeable folks about this... I am an Army PCO tasked with negotiating a request for equitable adjustment (REA) on a fixed price commercial contract for severable services that I recently inherited from a predecessor PCO. It's $5.6M, five year contract (base + four option years). The initial award was about two years ago--we are currently in the first option year. Shortly after award, during the base year, the Government realized it had vastly underestimated the magnitude and needed additional performance out of the contractor, and so the contract was modified (five times over the course of the first two years) to pull forward performance scope from the out years. So now the contractor has submitted an REA for additional OH costs related to administrative burden and greater than anticipated subcontracting costs in order to meet accelerated deadlines. The REA amount is significant, and the circumstances are much more complicated than what I'm able to provide in this forum, but, basically I've determined the REA has merit, and I'm trying to write up my merit analysis and price negotiation memo. I have a few questions I'm hoping someone can help me with. THANKS! SCOPE: As I said, I'm inclined to determine the REA has merit, but my analysis leads me to believe that we're dealing with an out of scope change. I say this after reviewing the Contract Attorney's Deskbook (Chapter 21), which outlines several factors to consider for scope determinations. Ultimately, to me the cumulative effect of all the prior changes may have constituted a "cardinal change". If that's the case, what's the change authority I'd use for the modification? In my experience, typically out of scope changes require a J&A, and with a J&A I'd use the applicable J&A authority as my mod authority--but that doesn't make sense since this is an REA, right? I'm not going to write up a J&A for all the contract changes that ALREADY happened am I? (Seems to me the modification associated with the negotiated REA is only to equitably adjust the contract as a result of the constructive changes leading up to this point.) Often I use the changes clause 52.243-1 as my modification authority, but it's my understanding that the changes clause 52.243-1 is only good for WITHIN-SCOPE changes. And since this is an REA and not a claim (yet, at least), using the disputes clause 52.233-1 wouldn't be correct either. So what do I put in the SF-30? FUNDS: I assume the fiscal law associated with an REA is the same as any other modification? I.e. Within scope modifications use award year money and out of scope modifications use current year money? Other related details: each of the aforementioned modifications were done bilaterally. The contractor signed each SF30 without a price proposal, but all along he was corresponding with the PCO and COR that he felt the contract scope was creeping larger and larger and as a result he was facing cost impacts he hadn't anticipated.
I've received an REA for an amount greater than $100K, but it does not have the claim certification verbiage. (Contractor either forgot or is not familiar with FAR guidance on claims and didn't include it.) Should I ask the contractor to include the appropriate verbiage so it fully meets a claim definition and can be properly treated as one? With the exception of the certification not being included, the REA meets all other requirements of a claim, and I am inclined to treat it as one. Any input would be appreciated!
What is the appropriate way to allocate costs for proposal preparation in this instance? The RFP for the contract I have identified certain performance specifications as tradeable. We bid this competitive proposal without bidding one of the specifications identified as such. We won and at kick-off, the customer indicated that the particular specification should not have been identified as tradeable. My company is in the process of preparing a proposal for this portion of the spec which is also included in the contract's statement of work. I am confused about how the costs to prepare this proposal should be allocated. I know that typically when you receive an RFP you are not allowed to charge the government for proposal preparation and it's charged to B&P. Would this be handled in this manner? Would we submit as an ECP? Are ECP preparation costs chargeable to the program? Is this considered an unsolicited proposal? Is this an REA? Are those costs chargeable to the program? Please advise.