con1212 Posted October 16, 2012 Report Share Posted October 16, 2012 Good afternoon, I have a question on withholding payments under 52.232-7. The contracting office wants to withhold payments since the contractor has taken about 3 months to find a replacement for at person that left. Right now the contractor is unable to say when they will be able to replace this person, since according to them, they are unable to find anyone with the required skill-set. Is the contracting office able to withhold payments for this? Hopefully this is enough to generate an answer; let me know if you need more. Thanks! Link to comment Share on other sites More sharing options...
napolik Posted October 16, 2012 Report Share Posted October 16, 2012 Under which paragraph of the clause would you find authority to withhold monies? Link to comment Share on other sites More sharing options...
Navy_Contracting_4 Posted October 16, 2012 Report Share Posted October 16, 2012 What payment are you planning to withhold from? Under a T&M/LH contract, the contractor may invoice only for hours actually provided. If they haven't had someone in a position for 3 months, they couldn't have been invoicing for it, so what is the rationale for withholding? Link to comment Share on other sites More sharing options...
napolik Posted October 17, 2012 Report Share Posted October 17, 2012 Paragraph (a) 7 provides for withholding of monies: (7) Unless otherwise prescribed in the Schedule, the Contracting Officer may unilaterally issue a contract modification requiring the Contractor to withhold amounts from its billings until a reserve is set aside in an amount that the Contracting Officer considers necessary to protect the Government’s interests. The Contracting Officer may require a withhold of 5 percent of the amounts due under paragraph (a), but the total amount withheld for the contract shall not exceed $50,000. The amounts withheld shall be retained until the Contractor executes and delivers the release required by paragraph (g) of this clause. Note that this withholding is unrelated to the contractor’s failure to provide personnel it is required to provide under the contract. If the contractor is failing to meet its obligations to provide qualified personnel, then you should not be paying it for hours not provided and you should consider issuing a delinquency notice described in FAR 49.607. Link to comment Share on other sites More sharing options...
Guest Vern Edwards Posted October 17, 2012 Report Share Posted October 17, 2012 The CO had better think long and hard before withholding payment due for hours actually worked because the contractor did not provide a certain kind of worker. I seriously doubt the legality of that course of action. Withholding payment is a very serious thing to do. If the CO refuses to pay for hours actually worked he or she will be vulnerable to a breach of contract claim. Link to comment Share on other sites More sharing options...
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