FAR 15.408 III (B) (2)

[Dene Slater]

FAR 15.408 states "include the current estimate of what the cost would have been to complete the deleted work not yet performed (not the original proposed estimates), and the cost of deleted work already performed." The contractor was paid for 200 widgets at $100 each in the base contract. Subsequently, the requirement was deleted with a change order. In response, the contractor proposed 116 widgets at $100. When the government questioned the number of widgets, the contractor's position was based on the FAR clause saying this is the current estimate based on the new construction carrier design maturing into the current configuration requiring a quantity of 116 versus the original 200. The government's position is that the giveback would be for 200 widgets not 116 since that was the original requirement. Is the FAR interpretation based on quantity or cost per item if work is deleted?

[joel hoffman]

It is difficult to understand the context of your question. In fact the description is confusing. For example:

Are these unit priced widgets? Or are they components that must be installed in an aircraft carrier or something, in which the design has changed?

You said the contractor was paid for 200 widgets, so did the contractor produce or purchase these and then provide them? Now the government doesn't need them?

What does the number "116" represent? A credit for 116 widgets not to be required? The revised number of widgets required by "new construction carrier design"?

What is the relationship of the 200 or 116 widgets to the original design and to the change?

[Dene Slater]

It is difficult to understand the context of your question. In fact the description is confusing.

Are these unit priced widgets? Or are they components that must be installed in an aircraft carrier or something, in which the design has changed?

You said the contractor was paid for 200 widgets, so did the contractor produce or purchase these and then provide them? Now the government doesn't need them?

What does the number "116" represent? A credit for 116 widgets not to be required? The revised number of widgets required by "new construction carrier design"?

What is the relationship of the 200 or 116 widgets to the original design and to the change?

[joel hoffman]

Dene, those questions are examples of my confusion. Your description of the facts is confusing to me.

As a new user, to reply to someone, you can just click on "reply", then scroll down to the type in entry box. the message you are replying to will be displayed within coding for a "quote". If you dont want to include the quote, just delete it before typing in your reply. You can keep the quote or abbreviate it. you can add your reply before or after the quote/

It is difficult to understand the context of your question. In fact the description is confusing. For example:...

[Dene Slater]

The components were part of a design change for carrier construction. The 200 widgets were not yet provided and the government is cancelling the requirement. Before the cancellation, the design changed the number of widgets from 200 to 116. The orginial requirement in the base contract was for 200 widgets. The contractor proposed a credit of 116 widgets. The government never got credit for the 84 widgets (200-116) when the design changed so the real question may be why not?

The contractor has provided FAR 15.408 as their justification for crediting 116 widgets instead of 200 on the giveback. In my mind, the clause is there to give the contractor credit for efficiencies for which they created (i.e underrun on a CPIF contract).

Thank you.

[joel hoffman]

The components were part of a design change for carrier construction. The 200 widgets were not yet provided and the government is cancelling the requirement. Before the cancellation, the design changed the number of widgets from 200 to 116. The orginial requirement in the base contract was for 200 widgets. The contractor proposed a credit of 116 widgets. The government never got credit for the 84 widgets (200-116) when the design changed so the real question may be why not?

The contractor has provided FAR 15.408 as their justification for crediting 116 widgets instead of 200 on the giveback. In my mind, the clause is there to give the contractor credit for efficiencies for which they created (i.e underrun on a CPIF contract).

Thank you.

Dene, if no mod was ever processed for the original reduction from 200 to 116 widgets, then it would seem that the current change is a deletion of 200 widgets.

If the government processed a mod earlier but didnt take a credit, I don't know what to tell you, without more information.

[Guest Vern Edwards]

Deleted.

[joel hoffman]

Vern, your scenario is incorrect. Dene explained in post #5 that somewhere along the line there was a "design change" that reduced the number of widgets from 200 to 116 with no explanation of how that was implemented.

Now the remaining 116 have been deleted and Dene thinks the government is due a credit for all 200 widgets.

We know they haven't been "provided". We don't know if they are commercial products that can be resold if already purchased or produced, if they were produced or not produced by the contractor or if they were purchased or not purchased. We dont know if they are severable items or not. What, if any or how much credit is due depends upon a lot of information that is lacking.

Dene needs to fully understand the scope of the deletion, tracing back from how the contract required 200 widgets to 0, now.

[Guest Vern Edwards]

Joel:

You are right. I see it now. Here is what he posted:

The components were part of a design change for carrier construction. The 200 widgets were not yet provided and the government is cancelling the requirement. Before the cancellation, the design changed the number of widgets from 200 to 116. The orginial requirement in the base contract was for 200 widgets. The contractor proposed a credit of 116 widgets. The government never got credit for the 84 widgets (200-116) when the design changed so the real question may be why not?

The contractor has provided FAR 15.408 as their justification for crediting 116 widgets instead of 200 on the giveback. In my mind, the clause is there to give the contractor credit for efficiencies for which they created (i.e underrun on a CPIF contract).

Apparently, here is what he meant:

1. There was a design requirement for 200 widgets.

2. A change reduced that number to 116.

3. Another change ("cancellation") further reduced it to 0.

4. The contractor is offering a price reduction ("giveback") based on only 116 widgets, instead of 200.

5. The contractor somehow bases that on FAR 15.408.

6. I don't understand. Please help me.

Why couldn't he have said that in the first place, instead of this:

FAR 15.408 states "include the current estimate of what the cost would have been to complete the deleted work not yet performed (not the original proposed estimates), and the cost of deleted work already performed." The contractor was paid for 200 widgets at $100 each in the base contract. Subsequently, the requirement was deleted with a change order. In response, the contractor proposed 116 widgets at $100. When the government questioned the number of widgets, the contractor's position was based on the FAR clause saying this is the current estimate based on the new construction carrier design maturing into the current configuration requiring a quantity of 116 versus the original 200. The government's position is that the giveback would be for 200 widgets not 116 since that was the original requirement. Is the FAR interpretation based on quantity or cost per item if work is deleted?

Reading some of this stuff is like reading Sanskrit carved into the wall of a 3,000 year old temple recently discovered in a jungle on a lost continent. The Sanskrit is hard because it was written by an ancient people. The stuff here is hard because the writers don't get their thoughts straight before they write.

The writers here owe you a debt of gratitude for the time you spend trying to figure them out. I'm out of patience with them.

I deleted my earlier post. Too bad, it was good.