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T4C


Orion

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I provided a contractor with consulting on his T4C with the AF. My fee was submitted with the settlement package and it's been several months without my inovice being paid so I began to suspect the contractor may not pay so I contacted the Contracting Officer and her reply was that since I was no longer working for the contractor the AF was not obligated to provide any information on the status of the settlement. I reminded the CO that once the contractor and AF settle he will submit or final payment and must certify that he has paid his subs, suppliers, etc. Since then the AF refuses to acknowledge my emails. What options do I have?

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Orion,

You don?t specify either the contract type (see FAR part 49 for other considerations, based on various contract types) or whether your T4C is ?Termination For Convenience? or a commercial contract and ?Termination For Cause?. I?m not an expert on terminations but I certainly don?t want to assume one or the other. I?d recommend reviewing part 49 for starters.

As buyerman mentioned, at a minimum, your first step is dealing with the prime. Keep in mind, the Air Force has privity of contract with the prime, not with you.

Randy

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Orion,

I assume you have some type of contract in place with the contractor. What does it say about payment terms?

In my view, this has nothing to do with T4C or the Termination Contracting Officer or the Air Force. This is a private matter solely between you and your client.

You have plenty of options, including legal ones. Why not pursue them?

Hope this helps.

(P.S., my contracts generally call for payment within 15 days. I'm currently awaiting a payment that's now past 60 days due. I feel your pain.)

H2H

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Guest Vern Edwards

I agree with here_2_help. This is a private matter. You have a classic case of the slow-pay or won't-pay customer. When dealing with a client that has been terminated, require payment of a retainer and make sure the consulting agreement expressly says that the payment to you is not dependent on the payment to the client by the government.

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Orion and any other potential subcontractors,

here-to-help and Vern provide excellent advice. When you negotiate subcontracts in the future, make sure your payment isn't dependent first on the prime being paid by the government. That usually is what most primes want. The reality is it shouldn't matter what the government does and doesn't do with the prime - you just need to provide work that fulfills your contractual requirement with the prime.

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  • 1 month later...

Vern,

I ran across a comment you made in Subcontracts and Subcontract Management regarding primes paying subs. Your comment was "Over the years, nonpayment and slow payment have been such issues that in 1995 Congress enacted legislation enabling COs to act in response to subcontractor complaints, despite the lack of privity. See Public Law 102-190, Sec. 806(a)(4). The law is implemented at FAR 32.112-1."

I've read FAR 32.112-1 and states the KO can "encourage the contractor to make timely payments to the subcontractor or supplier"...or "reduce or suspend progress payments to the contractor." Further it states

the KO can take administrative or remedial action. Again, how is the KO going support this when they will do not respond to my inquiries?

FAR 32.112-2 Subcontractor Requests for Information, seems to be the clause I need to initiate a response from the KO in this matter but will it help?

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Orion,

1. Do you have a contract with the entity being terminated? If so, what does it say about payment? If not, how do you (and the terminated entity) establish that you are an independent contractor?

2. Does your contract contain flow-down and other clauses that establish you to be a subcontractor? If not, why do you think you qualify for treatment as a subcontractor? Could you not simply be a management consultant?

3. If the terminated entity has included your costs in its Termination Settlement Proposal (TSP) then I believe it needs to pay you in the "ordinary course of business". That term is defined inconsistently among the various FAR payment clauses and, frankly, I'm not 100% clear on how it operates in a T4C environment. But the most common definition I can find is a) in accordance with the terms of your consulting contract, and/or B) within 30 days of submitting a request for payment to the Government. (Paraphrasing significantly here.) Where does your situation stand vis-a-vis the FAR definition of "ordinary course of business"?

4. In my view, your best course of action lies with an attorney. Depending on your answer to #1, above, you may want to consult with an employment attorney. Appealing to the TCO is not going to avail you much of anything, in my opinion.

But good luck!

H2H

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.

Orion,

now I understand your question about a FAR clause that is not in the contract.

My response to that thread supposed that you meant a clause in Part 52.

Disregard my earlier answer.

.

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.

Orion,

now I understand your question about a FAR clause that is not in the contract.

My response to that thread supposed that you meant a clause in Part 52.

Disregard my earlier answer.

.

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