No cost extensions/not invoicing for hours worked

[con1212]

Hi,

I work in a program where contractor support is provided under a firm fixed price level of effort task order. Due to unforeseen circumstances (caused by the agency), the contractor has not met the proposed level of effort at the end of option year 1. The contractor has been invoicing in equal installments, regardless of the level of effort worked. Since the contractor may end up being paid for a level of effort not achieved, would the contractor be able to work either: 1. under a no-cost extension 2. part of option year 2 without billing the agency?

Just want to gather some opinions to bring to contracts.

Thank you!

[Guest Vern Edwards]

If the contract is funded with an annual (one-year) appropriation, then you might have a problem under the bona fide need rule if you let the contractor earn what it has already been paid in current year money in a new 12 month period or a new fiscal year, since you obviously did not have those requirements during the current 12 month period or fiscal year.

[con1212]

Thank you for providing insight on this. Do you think the only option is requiring the funds are paid back?

[Guest Vern Edwards]

If the contract is level of effort and the government did not give the contractor enough work to spend the level of effort, the most appropriate course of action is a partial termination for convenience. The contractor should repay any excess payments that it received, less any termination settlement owed to the contractor by the government.