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We are a telecommunications provider to the US Government and provide terrestrial data circuits to remote, and sometimes hostile, regions in the world. Under a 12-month contract, the Government requested a proposal for 12 months of service. The circuit is not considered accepted and billable until the Government performs its testing IAW the acceptance criteria. Given the regions we deliver service to, it is normal for circuit activation and testing to take three or more months from execution of a subcontract agreement to the activation and testing of the circuit. The salient points are: 1. The Government contracted for a terrestrial data circuit with a certain number of Megabits per second (Mbps) at a certain location specified in the SOW. 2. The period of performance was 5/1/15 – 4/30/16. 3. In Section B, the Unit specified was “EA,” and the quantity is “From 0.0000” “By 1.0000” to “To 1.0000” 4. The contract type was fixed price incentive in accordance with FAR Part 16.202. 5. We provided the Mbps to the locations specified in the contract beginning in November 2015. There are opinions internally whether we can bill the full amount based on service being provided for twelve months, even though the service was only accepted at month six or not. Terrestrial carriers (e.g. Verizon, Level3, etc.) typically require a 12 month commitment, so even though this firm price, severable service, extends beyond the PoP we will be billed for the full twelve months. The stronger and most likely reading of the contract is that the full amount of the annual service should not be charged unless the service was provided for the full 12-month period. However, reading the FAR suggests we may be able to bill for 12 months of service. Nonetheless, based on my experience with post hoc reviews by stakeholders OTHER THAN the contracting officer (such as inspectors general), a pro rated invoicing approach rather than invoicing the full amount, may be the correct interpretation. The contract does not state if it contemplated “immediate” commencement of performance, it is notable that the documents clearly provide that the period of performance was to be 5/1/15-4/30/16, which is exactly one year. (clause 152.211-705). In addition, the Statement of Work provides that the period of performance was to be “12 months from contract award.” Whether or not it is of note, there is no feasible way for service to commence immediately after order, and we are not billed by our subcontractor until the circuit is tested and accepted by the Government. The question then becomes whether “performance” in this context means (a) to begin to build the required communications capacity, or (b) to actually provide the required communications capacity. If “performance” requires only working on the development of the promised capacity, as opposed to actually providing the promised capacity as a service, then it appears that the fixed fee would have been owed. The contract does not offer any indication as to what it intended. I would also note that nothing in the contract appears to require a pro rating of the price to reflect the timing of the in-service dates (or acceptance dates). Nonetheless, there does not appear to be any language in the contract indicating that the customer can be charged for anything other than an operable network service that meets all of the speed and other technical parameters, and that this service is subject to a fixed price for a full 12-month service period. The task order has ended, but there is some discussion if we are entitled to invoice and be paid the fixed price established in the contract. The incentive monies are secondary, and will be determined and paid in accordance with the terms of the contract. The task order has ended, but there is some discussion if we are entitled to invoice and be paid the fixed price established in the contract. The incentive monies are secondary, and will be determined and paid in accordance with the terms of the contract. As a follow-on question: The Government awarded a single source follow-on contract for this service to begin 1 May 2016 – 30 April 2017. If the guidance is that we can bill for the full twelve months, should there be concern about billing, effectively, twice for the same service (trailing six months after PoP end, and first six months of follow-on) even though the same service is being provided under a different contract?
I have a contract to provide cyber security monitoring and analysis which are severable services. I have a request to add another set of analysis, which would cost approximately 10% of the total contract value. My legal team is telling me that since these are severable services, any additional work is consdered out of scope and must be done with a J&A. The work is the same or similiar as what is currently being done and would not have changed the competition at time of award. My question is, can you never add work to a severable services contract and call it within scope because there is a cost associated with it? Can I also modify the option periods since they have not yet started? Thank you in advance for any information!
Am I correct that a contract for a nonseverable service must be fully funded when awarded or when an option is exercised, but that a contract for severable services may be incrementally funded? If a contract has line items for both nonseverable and severable services, can the line items be treated independently even though under one 'severable' contract? Does the 2410a exemption apply equally to annual and multi-year appropriations? Thanks.
rios0311 posted a topic in Contract AdministrationQuestion 1: Is it allowable to have a contract with multiple CLINs that all have different POPs in effect? In other words, some CLINs might be in their base POP, while others might be in option 1 or 2? Some CLINs are for severable services, while others are for nonseverable services. Background: I inherited a GSA order for the purchase and integration of IT software, project management support, and training services. There are six CLINs; some for severable services and some for nonseverable services. Each CLIN has its own stated POP with a base period and 4 options. The geniuses that awarded the contract assumed that everything would go as planned and apparently did not predict that the POPs might eventually get out of sync. Further, they did not realize or did not know that they should not have split up a nonseverable service with options. Due to a stop-work order we issued some months ago, and due to the October government shutdown, the nonseverable services were not completed during the base POP. I agreed to extend the period of performance of the nonseverable CLINs and I was planning on realligning the POPs of all the other CLINs so they all match. However, some of the other activities (under different CLINs) need to begin as originally scheduled (during the original dates of option 1). Had I been the awarding CO, I would have awarded an IDIQ and placed the nonseverable services uder separate task orders and the severable services on a single task order. But since our agency uses no-year funds only, I would have simply awarded a contract with a single POP for the base and all options (no POP for each CLIN) and had all the activities take place according to a project plan milestone schedule. Since the core service is nonseverable (installation/integration), I would have extended the base POP until the installation/integration was completed, without affecting the performance of the severable tasks. Question 2: How can I fix my contract? In other words, can I extend by 2 months the base period of performance on CLINs 0001 and 0002 to allow the contractor to finish the nonseverable tasks, but exercise option 1 on CLINs 0003, 0004 and 0005 since those services are required now?