Honest_iago

Can CO withhold base fee payment for poor performance?

5 posts in this topic

On a CPAF contract with a base fee, must the contractor receive the base fee amount regardless of the quality of its performance? This question is separate and distinct from any award fee evaluation under the contract.

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nevermind

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What does your contract say? Generally speaking, the answer to that would be no. I have seen CPAF contracts that permitted base fee deductions when performance was really terrible, but I think that is counter-intuitive to the purpose of having the base fee. If your contract does not specifically permit such an action, I would not do it.

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What does your contract say? Generally speaking, the answer to that would be no. I have seen CPAF contracts that permitted base fee deductions when performance was really terrible, but I think that is counter-intuitive to the purpose of having the base fee. If your contract does not specifically permit such an action, I would not do it.

First, thank you for taking the time to respond. Yes, if the contract was active I would look for an answer there on the presumption that the status of base fee (at risk or not) would be addressed. Alas, the contract hasn't been awarded yet and so I may have posted my question to the wrong forum. I have not found any policy or other clear guidance on the issue. It has been discussed on this site previously with contrary opinions, but no supporting guidance, except for the logic of the arguments. Because logic isn't always a reliable guide for making contracting decisions and may be inconsistent with rules I was hoping to find some issued guidance with regard to that part of the larger incentive plan. In short, help!

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Honest Iago,

The standard Inspection clauses give the Government the right to withhold fee under certain circumstances. For example, 52.246-5(d) states:

(d) If any of the services performed do not conform with contract requirements, the Government may require the Contractor to perform the services again in conformity with contract requirements, for no additional fee. When the defects in services cannot be corrected by reperformance, the Government may?

(1) Require the Contractor to take necessary action to ensure that future performance conforms to contract requirements; and

(2) Reduce any fee payable under the contract to reflect the reduced value of the services performed.

Does that answer your question?

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