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Recently I have learned about customer requests to price out potential scope changes to an awarded UCA. These requests have caused some consternation on the contractor's side of the house.

Assume the contractor submits a proposal and, while fact-finding is proceeding, the customer decides to award a UCA with a scope of work equal to what the contractor proposed. The contract will be definitized later, and the contractor is pretty sure (based on prior experience) that it will be required to submit a definitization proposal based on actual costs incurred.

Almost immediately, the customer requests the contractor to prepare a priced proposal for a scope change--a technical enhancement to an in-scope widget. Contractor assumes the price delta will be against the price it initially proposed. But the customer's request does not reference the Changes clause and there is some confusion as to whether the new effort represents a change of the original scope or new work, because the customer says that it will only authorize the new effort if it likes the proposed price. And it may do so via a new contract vehicle vs. a mod to the existing contract.

It's not clear if the contractor is actually required to submit the proposal since the customer's request never actually says that's the case (though of course the contractor would be foolish not to submit a proposal when its customer requests one).

Meanwhile another, similar, request for scope change proposal comes in. And another. But the original UCA has never been definitized and that original proposal has pretty much lost its relevance by this time as a baseline. Oh yeah, and fact-finding on the original proposal continues ....

Following are my questions.

1. By what means does the government normally request changes to an existing scope of work when the contract vehicle is a UCA? In the situation described above, can the contractor safely assume the changes are via the Changes clause?

2. Does the fact that the customer will authorize changed scope only if it likes the proposed price affect the situation?

3. What is the impact on the analysis if the customer issues a new contract vehicle for the changed scope vs. modifying the existing UCA?

4. For purposes of calculating the price delta, should the contractor assume that all previously submitted scope change proposals will be accepted? Or should it still hold to the original UCA scope of work?

I'm sure there are other issues worth noting, but at this point my head is hurting. So feel free to go beyond the questions above in your response. Thanks in advance.

Here_2_Help

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Guest Vern Edwards

1.A. I don't know that there is a "normal." The way the government has done it in your case sounds okay to me.

1.B: The government must use the changes clause only if it plans to order the change unilaterally. Otherwise, it can do it through mutual agreement.

2. I don't know.

3. I don't know.

4, I don't know. Why don't you ask the customer?

You have asked nervous nelly/paranoid pete questions. I don't know why you think anybody here could be expected to give you good answers.

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You have asked nervous nelly/paranoid pete questions. I don't know why you think anybody here could be expected to give you good answers.

Fair enough. For what it's worth, we need to decide how to charge the proposal prep costs, either to the customer as direct costs (if we determine the proposal is required) or as B&P.

Based on your response, I'm going with required.

Thanks.

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Guest Vern Edwards

Do me one favor: Stop referring to 'scope changes." I think you mean that the customer wants to change the specification or the statement of work. In order to do that under the changes clause the government cannot change the scope of the contract. If the government wants to change the scope of the contract it cannot do so by change order.

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Best not to overcomplicate.

As a contractor, I would define the ground rules up front to protect myself, and communicate my intentions clearly, first verbally and then formally, to the Goverment customer: A request to price new scope would be considered a change under the Changes clause, and my proposed UCA pricing would be revised to include actual direct costs incurred of pricing the scope change, regardless of whether the scope were ever to actually be changed.

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Guest Vern Edwards

A request to price new scope would NOT be a change under the changes clause. That's wrong. Does anyone read the changes clause?

First, the changes clause says nothing about quotes or offers for proposed or prospective changes. So the clause has no bearing on requests for pricing.

Second, the changes clause authorizes the CO to unilaterally change certain things "within the general scope of the contract." It then provides for an equitable adjustment if any such change causes an increase or decrease in the price or delivery schedule. The changes clause has no bearing on an agreement to change the scope of the contract, and it has no bearing if the contracting officer is not going to issue a change order. If the CO wants to change the contract without issuing a change order, he or she merely asks the contractor for a quote or offer and negotiates a supplemental agreement under the parties' general power to change their contract "by mutual agreement."

This is Contracting 101, or should be.

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A request to price new scope would NOT be a change under the changes clause. That's wrong. Does anyone read the changes clause?

First, the changes clause says nothing about quotes or offers for proposed or prospective changes. So the clause has no bearing on requests for pricing.

Second, the changes clause authorizes the CO to unilaterally change certain things "within the general scope of the contract." It then provides for an equitable adjustment if any such change causes an increase or decrease in the price or delivery schedule. The changes clause has no bearing on an agreement to change the scope of the contract, and it has no bearing if the contracting officer is not going to issue a change order. If the CO wants to change the contract without issuing a change order, he or she merely asks the contractor for a quote or offer and negotiates a supplemental agreement under the parties' general power to change their contract "by mutual agreement."

This is Contracting 101, or should be.

Vern, when the CO asks the contractor for a quote or offer and negotiates a supplemental agreement under the parties' general power to change their contract "by mutual agreement," is the contractor required by a provision of the contract to prepare and submit that quote or offer? That's the crux of my dilemma.

Thanks

H2H

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H2H, here's a random thought for you: FAR 16.603-3© provides, "Letter contracts shall not...e amended to satisfy a new requirement unless that requirement is inseparable from the existing letter contract. Any such amendment is subject to the same requirements and limitations as a new letter contract." I recommend getting advance agreement from the government CO on treating these costs as direct costs associated with the definitization.

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H2H, here's a random thought for you: FAR 16.603-3? provides, "Letter contracts shall not...e amended to satisfy a new requirement unless that requirement is inseparable from the existing letter contract. Any such amendment is subject to the same requirements and limitations as a new letter contract." I recommend getting advance agreement from the government CO on treating these costs as direct costs associated with the definitization.

Jacques,

Thanks for that "random thought." That's great except for the fact that the customer would rather have all the other customers pay for the cost of pricing out the multiple specification changes related to the UCA, so there's zero chance of getting an advance agreement. But your input was helpful and I'll remember that citation for the future.

H2H

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Guest Vern Edwards
Vern, when the CO asks the contractor for a quote or offer and negotiates a supplemental agreement under the parties' general power to change their contract "by mutual agreement," is the contractor required by a provision of the contract to prepare and submit that quote or offer? That's the crux of my dilemma.

Thanks

H2H

H2H:

A contractor need not submit a proposal or quote upon request unless the contract requires that it do so.

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