Period of Performance vs. Delivery Date on Construction

[Guest AS]

So I was asked for the logic of using POP vs. a Delivery Date for the completion of a construction project. To me, it is a POP since construction falls under the Service arena...thoughts?

[ji20874]

You don't need to call it either one -- just use the SF-1442 and complete block 11 -- you're done.

It is a completion date. 

[joel hoffman]

1 hour ago, Guest AS said:

So I was asked for the logic of using POP vs. a Delivery Date for the completion of a construction project. To me, it is a POP since construction falls under the Service arena...thoughts?

Can you elaborate please?

Please forget about “under the service arena”.

By POP, I am assuming that you mean a number of calendar days for the Period of Performance. If so, often this would often  be expressed as a number of calendar days to complete the work, ready for acceptance   after receipt of the notice to proceed.

Some organizations start the time clock upon the date of award.  But the contractor can’t start work upon award, before meeting various requirements, such as providing acceptable bonds and proof of insurance, and perhaps others such as preliminary schedule with at least the first X calendar days detailed, Quality Control and Safety Plans submitted, attendance at the Post Award Conference, etc. Because this can be a significant constraint to commencing work with the clock ticking, I don’t recommend it.

Instead, I recommend issuing the NTP after submission of satisfactory bonding, proof of insurance and other pre-work submittals and upon conclusion of the Post Award conference. We scheduled the post award conference with the contractor for a date as soon as possible after submitting bonds and insurance and maybe some other critical submittals. The KO would usually sign the NTP and have the ACO hand it to the contractor after the PA conference. This general process should be spelled out in the contract.

Putting a pre-determined delivery date in the solicitation can be very tricky and ambiguous because the start date ( NTP date) is often indeterminable at the time of proposal submission.  I don’t recommend it except in very special circumstances. Plus, what if there are excusable delays or time extensions due to government actions or errors, omissions, changes, etc. This would, in effect, build in government caused acceleration for excusable or excusable, compensable delays that must be absorbed within the fixed schedule. And if the schedule could be extended, why would you state a mandatory completion date anyway? 

 

[Jamaal Valentine]

@Guest AS, well, the first page of the SF-1442 describes it as a performance period (See SF-1442, block 11).

[joel hoffman]

23 minutes ago, ji20874 said:

You don't need to call it either one -- just use the SF-1442 and complete block 11 -- you're done.

It is a completion date. 

Under SF1442, Block 11, It’s a completion period not a completion date.
EDIT:  If the completion period commences upon receipt of award, the completion date would be instantaneously determinable by the contractor. The Government would have to determine when the contractor received the award . This “should be” relatively easy, if done using electronic contracting communications. 

“11. The contractor shall begin performance within_______ calendar days and complete it within_______  calendar days after  receiving
 ____ award, ____notice to proceed. This performance period is ___mandatory ____negotiable. (See ___________________).”

Edited September 1, 2022 by joel hoffman

[Guest AS]

On 9/1/2022 at 9:04 AM, joel hoffman said:

Can you elaborate please?

Please forget about “under the service arena”.

By POP, I am assuming that you mean a number of calendar days for the Period of Performance. If so, often this would often  be expressed as a number of calendar days to complete the work, ready for acceptance   after receipt of the notice to proceed.

Some organizations start the time clock upon the date of award.  But the contractor can’t start work upon award, before meeting various requirements, such as providing acceptable bonds and proof of insurance, and perhaps others such as preliminary schedule with at least the first X calendar days detailed, Quality Control and Safety Plans submitted, attendance at the Post Award Conference, etc. Because this can be a significant constraint to commencing work with the clock ticking, I don’t recommend it.

Instead, I recommend issuing the NTP after submission of satisfactory bonding, proof of insurance and other pre-work submittals and upon conclusion of the Post Award conference. We scheduled the post award conference with the contractor for a date as soon as possible after submitting bonds and insurance and maybe some other critical submittals. The KO would usually sign the NTP and have the ACO hand it to the contractor after the PA conference. This general process should be spelled out in the contract.

Putting a pre-determined delivery date in the solicitation can be very tricky and ambiguous because the start date ( NTP date) is often indeterminable at the time of proposal submission.  I don’t recommend it except in very special circumstances. Plus, what if there are excusable delays or time extensions due to government actions or errors, omissions, changes, etc. This would, in effect, build in government caused acceleration for excusable or excusable, compensable delays that must be absorbed within the fixed schedule. And if the schedule could be extended, why would you state a mandatory completion date anyway? 

 

What I meant was in the SF1442 or DD1155 use either POP (e.g. Period of Performance From  01 Jan 2022 To 31 Dec 2022) or Delivery (e.g. Deliver by 31 Dec 2022).

[joel hoffman]

7 hours ago, Guest AS said:

What I meant was in the SF1442 or DD1155 use either POP (e.g. Period of Performance From  01 Jan 2022 To 31 Dec 2022) or Delivery (e.g. Deliver by 31 Dec 2022).

I don’t know what organization you are in. However, FAR 36.701 (a) prescribes the use of SF1442 for construction contracts expected to exceed the SAT limit and may be used for contracts at or below the SAT.

FAR 36.701 (b) allows the use of Optional Form 347 for construction contracts at or below the SAT.

However, DFARS PGI 236.701 (c) prohibits the use of the OF 347. So, use of the SF1442 is required for DoD construction contracting.

DFARS doesn’t have a paragraph 236.701, so DoD would refer to FAR 236.701 and PGI 236.701 (c).

Block 15 of the OF 347 (for non-DoD construction at or under the SAT) uses a delivery on or before date.

The SF 1442 , block 11 is shown above and doesn’t use either form to define the period of performance that you propose above. 

As “FAR” as I know, unless I’m missing something in DFARS, the DD 1155 is not for use on construction contracts. 🤪

[Vern Edwards]

On 9/1/2022 at 6:20 AM, Guest AS said:

So I was asked for the logic of using POP vs. a Delivery Date for the completion of a construction project. To me, it is a POP since construction falls under the Service arena...thoughts?

How is it that there are so many people in the business that are ignorant of fundamentals? Construction is in the construction arena, FAR Part 36, not the service arena, Part 37. Construction has a commencement date and a completion date, not a period of performance.

You are supposed to learn such stuff on the job or in a class. What the hell is going on in contracting offices?

[joel hoffman]

Actually,  “The contractor shall begin performance within _____calendar days and complete it within   _____calendar days after receiving [ ] award, [ ]notice to proceed. This performance period is [mandatory] [negotiable]. “
There are no dates specified on the SF1442. There is an applicable start event and a number of days to complete the project. The performance period isn’t defined by dates. A fourth grader ought to be able to determine the dates by using simple math, as long as they know that day 1 is the day after the date of the selected “start” event. 

[Vern Edwards]

8 hours ago, joel hoffman said:

Actually,  “The contractor shall begin performance within _____calendar days and complete it within   _____calendar days after receiving [ ] award, [ ]notice to proceed. This performance period is [mandatory] [negotiable]. “
There are no dates specified on the SF1442. There is an applicable start event and a number of days to complete the project. The performance period isn’t defined by dates. A fourth grader ought to be able to determine the dates by using simple math, as long as they know that day 1 is the day after the date of the selected “start” event. 

The reason the form has no dates is that they depend on the NTP, the date of which is not set until after award. The parties must establish the dates and the CO must document the file.

[C Culham]

 

 

On 9/1/2022 at 6:20 AM, Guest AS said:

So I was asked for the logic of using POP vs. a Delivery Date for the completion of a construction project. To me, it is a POP since construction falls under the Service arena...thoughts?

The logic is based on the specifics of the construction project as whether a POP or Delivery Date is stipulated.  A read of FAR subpart 11.401 may help you in understanding the general basis of for establishing a performance schedule or delivery date.  While the FAR reference provided will take you there specific reference to FAR 52.211-10 should help further in understanding that there is more to it than some dang form (1442) which can be edited to either delete Block 11 in its entirety or edited to make reference to a delivery date pursuant to the following FAR clause with its Alternate I.  

"52.211-10 Commencement, Prosecution, and Completion of Work.

Commencement, Prosecution, and Completion of Work (Apr 1984)

The Contractor shall be required to (a) commence work under this contract within _________ [Contracting Officer insert number] calendar days after the date the Contractor receives the notice to proceed, (b) prosecute the work diligently, and (c) complete the entire work ready for use not later than ______________.* The time stated for completion shall include final cleanup of the premises.

* The Contracting Officer shall specify either a number of days after the date the contractor receives the notice to proceed, or a calendar date.

(End of clause)

Alternate I (Apr1984). If the completion date is expressed as a specific calendar date, computed on the basis of the contractor receiving the notice to proceed by a certain day, add the following paragraph to the basic clause:

The completion date is based on the assumption that the successful offeror will receive the notice to proceed by _______________ [Contracting Officer insert date]. The completion date will be extended by the number of calendar days after the above date that the Contractor receives the notice to proceed, except to the extent that the delay in issuance of the notice to proceed results from the failure of the Contractor to execute the contract and give the required performance and payment bonds within the time specified in the offer."

 

[joel hoffman]

3 hours ago, Vern Edwards said:

The reason the form has no dates is that they depend on the NTP, the date of which is not set until after award. The parties must establish the dates and the CO must document the file.

Yep, I agree.

Normally (at least in USACE and I believe, NAVFAC and USAF), unless an RFP allows competitive offerors to propose the performance period, the government would establish the number of days and denote it in the RFP. Industry would then be able to develop and price the proposal, accordingly.

In the event that the government allows industry to propose the length of the performance period, either on competitively negotiated or sole source negotiated acquisitions, the parties establish the period. The dates will depend upon either the NTP date or award date, whichever is checked on the SF 1442 (or other authorized form, as applicable) for the start date (day 0).

Examples of competitively negotiated performance periods: For the ~ $50 billion dollar Army Transformation Program with design-build and traditional design-bid-build acquisition methods, one of the Army’s primary goals and objectives was to significantly shorten acquisition  times for new and/or renovated facilities. We had the industry propose the required performance period, as an important evaluation factor.

This required significant streamlining of and integrating both design and construction processes.

In addition to emphasizing standardized, performance based design criteria for the numerous standard facility types, the USACE used standardized and more streamlined design-build performance  processes. This fostered innovation and shorter and more economical,  integrated design and construction methods.

Partnering and more collaborative processes were also stressed.

A friend of mine was the Area Engineer at Ft Bragg, NC. He performed a comparison study of performance times for the numerous MILCON Transformation Program projects vs. the traditional, previous  design-build and design-bid-build methods for similar facility types at Ft. Bragg. He told me that the average for MILCON Transformation projects were 40% less time to acquire than previous design-build projects and much shorter than the construction phase of design-bid build construction contracts.

On one site visit to Ft Bragg, I observed framing erection of a large, six story barracks. The contractor erected three or four stories of framing that day!

[Some other primary Army objectives were to obtain high quality design and construction and award full project scope within 100% of the Programmed Amount for the projects - which had rarely been achieved for Army (and almost never for Air Force) MILCON programs.

One year during the MILCON Transformation Program, circa 2010, the Chief of Engineers announced to a national Society of American Military Engineers conference audience that the Army had awarded 99% of total  MILCON Program scope within 100% of the PA during the latest FY. I had never seen that level of Army performance achievement before then.

We never achieved that with the Air Force but that is another story.] 

[joel hoffman]

Regarding using a notice to proceed date to begin the performance period and making the furnishing of acceptable bonding and required insurance a condition for beginning work, see also clauses or provisions that establish a stated period for providing acceptable bonds or other surety protections.  for instance: 
 

Bonds 

“28.101-2 Solicitation provision or contract clause.

      (a) The contracting officer shall insert a provision or clause substantially the same as the provision at 52.228-1, Bid Guarantee, in solicitations or contracts that require a bid guarantee or similar guarantee. For example, the contracting officer may modify this provision-

           (1) To set a period of time that is other than 10 days for the return of executed bonds…”

“28.102-3 Contract clauses.

      (a) Insert a clause substantially the same as the clause at 52.228-15, Performance and Payment Bonds-Construction, in solicitations and contracts for construction that contain a requirement for performance and payment bonds if the resultant contract is expected to exceed $150,000. The contracting officer may revise paragraphs (b)(1) and/or (b)(2) of the clause to establish a lower percentage in accordance with 28.102-2(b). If the provision at 52.228-1 is not included in the solicitation, the contracting officer must set a period of time for return of executed bonds.”

If the organization intends to start the performance period at award, before issuing NTP, the organization needs to take into account the time required for furnishing bonds and insurance when  determining and establishing the performance period.

One should not issue NTP for any on-site performance or before obtaining acceptable bonds or other acceptable surety and required insurance. I would personally consider not giving NTP for off-site performance activities such as fabrication or other significant expenses prior to furnishing bonds.

Edited September 16, 2022 by joel hoffman
Changed “period of performance” to “performance period” consistent with Block 11 of SF 1442

[Vern Edwards]

@joel hoffmanWhy did you use the term “period of performance” with respect to construction contracts in your last post? 

[joel hoffman]

2 minutes ago, Vern Edwards said:

@joel hoffmanWhy did you use the term “period of performance” with respect to construction contracts in your last post? 

Block 11 of the SF 1442 uses the term “performance period”:

“…This performance period is ___mandatory ____negotiable. (See ___________________).”

I will change my references to “performance period”.

[Krimz]

On 9/15/2022 at 6:14 PM, Vern Edwards said:

How is it that there are so many people in the business that are ignorant of fundamentals? Construction is in the construction arena, FAR Part 36, not the service arena, Part 37. Construction has a commencement date and a completion date, not a period of performance.

You are supposed to learn such stuff on the job or in a class. What the hell is going on in contracting offices?

I think contracting has a gap in knowledge.  A lot of old timers either retired or found new offices, and there's less mentoring occurring.  That's not an excuse, but I think that's what's happening.  

I'm still relatively new to contracting, but I supervise a team and I do my best to teach them basics and the why of what we do.  I actually pass along a lot of "Vern Edwards perspective", so thanks for being here and giving that freely.  I'll probably ask the occasional stupid question from time to time, but I always try to find the answer before asking.

 

As for OP's question:  I get similar questions from my crew.  Our system automatically prints a "Period of Performance" in the header and line level of our forms (we're required to enter a POP in our system so finance knows whether an invoice is within the terms of the contract.  This is obviously geared toward services rather than construction, so we're just sure to add enough padding to the POP and then delete it from the form our system prints out), so we delete it and let the SF1442 block 11 stand, along with 52.211-10 which is in all of our construction contracts.  I'd rather not print the same information in two places, but right now that's how our system works so we just deal with it.