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Good Morning,

A Contractor was awarded a firm-fixed price delivery order to deliver thousands of commercial radios by 4/30/11. The delivery schedule broke out how many radios would be delivered per month over the course of the delivery order. The COR and Program Office met with the Contractor a few months ago and informed it that a newer version of the radio may be required so the Contractor stopped production of the remaining radios, anticipating a modification to the delivery order. The KO was unaware of the conversations until recently and did not know that the Contractor had stopped production and delivery of the radios. After speaking with the COR and Program Office the KO did not modify the delivery order for the newer radios due to funding restrictions and informed the Contractor that it was to deliver the current radios as scheduled. The Contractor informed the KO that it was impossible to deliver by 4/30/11. Taking into consideration that the COR and Program Office did not have explicit, apparent or implied authority to require the Contractor to stop producing the radios the KO extended the delivery schedule by a few months. The Contractor was also at fault in this situation for not coming to the KO for direction to stop production and was informed so.

The Contractor is now asking for a progress payment for all of the long lead parts that were purchased to produce the remaining radios. The justification made by the Contractor is that it cannot pay its subcontractors and they will accrue interest from their suppliers. The delivery order did not contain the progress payment clause. The KO has received resistance from management that it would be inappropriate to do so. I did some research and couldn't find anything prohibiting the KO from doing so. I also found a reference to the Cibinic and Nash Reports: Postscript: Timely Payment of Subcontractors (Nov. 1993) and Timely Payment of Subcontractors: Is the Government Responsible (June 1993).

Thanks for any feedback.

Prezmil2020

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Guest Vern Edwards

Neither of those articles has any bearing on your situation. None whatsoever. If anyone is thinking of violating Thomson Reuter's copyright by sending copies to you, they had better not say so publicly.

In light of the fact that it looks like the contractor is going to default, it would be foolhardy to give him progress payments before you decide what to do about that issue.

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Neither of those articles has any bearing on your situation. None whatsoever. If anyone is thinking of violating Thomson Reuter's copyright by sending copies to you, they had better not say so publicly.

In light of the fact that it looks like the contractor is going to default, it would be foolhardy to give him progress payments before you decide what to do about that issue.

I understand the copyright issue. I am in the process of getting the report for our office as we speak. The reason why I referenced those reports is because I found them in the definition of Progress Payment in the Government Contracts Reference Book, 3rd Edition. Thought they were relevant as the Contractor is stating that it cannot pay its subcontractors. The delivery schedule was extended and the Contractor has agreed to the new terms and conditions so the Contractor is no longer in default.

Thanks.

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Are you deployed in one the bad places?

Like I said in an earlier post, the training program is weak and resources are limited. Trying to learn from past mistakes and not continue bad practices shown me when I first started. Trying to make this a good place.

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