Jump to content
The Wifcon Forums and Blogs

Researching

Terms and Conditions under an IDIQ Contract

Recommended Posts

The terms and conditions in the base IDIQ contract apply to all orders issued under that IDIQ contract. What would you do if the government, 3 years into the contract, issued a mod that updated all of the terms and conditions to newer revisions and also added/changed other clauses?

The purpose of this modification, written in the mod by the government, did not state that the above described changes were being made. Rather the purpose of the modification stated clearly the purpose, i.e., update the SOW and a few other changes we had negotiated. We were expecting the mod to include the changes listed in the purpose.

Also, the contracting agency had changed. The new contract agency wanted to include, in this mod, all of the P000 mods the prior agency had issued. In doing this, this mod included the entire contract. I think, when the entire contract was reprinted the Section I that was included was the current set of terms and conditions for that agency vs. the terms and conditions contained in the base IDIQ contract.

Thoughts on objecting to this?

Share this post


Link to post
Share on other sites

It's a business decision you have to make. Do you object to the new/updated clauses? Do they have cost impacts on you?

Share this post


Link to post
Share on other sites

Noting ji’s response to the question I wonder if we (here on WIFCON) lend to the sometimes questioned capabilities of the acquisition workforce. While I might agree with his response in part I do wonder if just telling a contractor “it’s a business decision” could be an answer to anything crazy an agency CO wanted to do? So what is the right answer – Take your lumps and live with it, or stand up and exercise your contractual rights. I pick the latter. Why? Because it is a contract, a mutual agreement on getting something done and outside a FAR Part 43 changes clause, if in the contract, nothing should be done unilateral. I might add that if you as a contractor wanted to do something crazy like transfer the contract to another entity without following novation procedures the agency would be all over you in a blink of an eye rather than just accepting the action as a business decision.

Beyond the soap box distraction above here are my thoughts…

If it is a commercial item contract written under the authority of FAR Part 12 and carries the applicable changes paragraph of FAR clause 52-212-4 the Government should not do anything without “written agreement of the parties.” Otherwise one could argue possibly breach of contract and/or constructive change. So in the end you might make a business decision and say okay but prior to doing so I would strongly suggest you advise the CO that they cannot do what they are doing unless and until you do agree.

Who are the entities – DoD to DoD or mix it up with a civilian agency? If DoD to DoD you may want to read DoD’s supplement to the FAR, the DFARS, at 204.7001©.

Or did the contract really not change agencies, like VA to USDA, but simply contract administration offices, like DLA to DCMA?

Do you have subcontractors? If so have you considered the impact?

So have you asked the transferring agency if they are deobligating the contract and if the new agency (re)obligating the contract with their color of money? Is the contract number changing?

All in all transferring the contract without any changes to the terms and conditions other than the agency as you have noted suggests strongly that the current contract should be Terminated for Convenience and reissued. Noting the termination in this manner I point to FAR 49.109 regarding settlements especially no-cost settlement at 49.109-4.

If they are changing everything as you suggest I cannot imagine what new clauses and respective laws and statutes you would subject too, have you? Heck they might even be large enough to suggest a change in scope suggesting the agency should resolicit the remaining work.

But then again I can only imagine a whole bunch of things to consider and do!

So I will stop here and suggest strongly that you contact legal counsel that is well versed in Government contracting, with hopes that such counsel would assist you in looking at all 4 corners of the contract and help you determine what to object to before you make that business decision.

Share this post


Link to post
Share on other sites

Researching, have you looked at FAR 1.108? That might help you make up your mind on what to do in regard to the change in FAR clauses in the contract?

Share this post


Link to post
Share on other sites

God.

Carl, you are absolutely right.

Researching: Don't read FAR. There's nothing in there about this. You are dealing with institutional ignorance. I addressed this topic in my blog. Unless that contract includes a very unusual clause that gives the government an express right to do so, the government has no legal right to unilaterally update contract clauses after contract award.

THERE IS MORE TO CONTRACTING THAN REGULATIONS! THERE IS SUCH A THING AS CONTRACT LAW!

Here is what you do: Hire a good lawyer. Unless the contract includes a clause that expressly allows the Government to do what it did, tell the lawyer to tell the dummies that their mod is a breach of contract and that they had better withdraw it. Demand a final decision of the contracting officer within the statutorily specified time. If the CO decides not to withdraw the mod or if they terminate you for convenience, appeal to the U.S. Court of Federal Claims seeking breach damages.

Share this post


Link to post
Share on other sites

Carl,

When I said its a business decision, I didn't imply the contractor had to accept it -- I meant the contractor had to make a business decision -- the contractor can choose to accept it in the interest of not offending its goverrnment contracting partner, or it can choose to do what Vern suggests. The contractor has to decide whether to fold or to use its backbone. I asked questions to help in making that decision.

Wow! My comment led to you think that I'm contributing to the "sometimes questioned capabilities of the acquisition workforce"?

Share this post


Link to post
Share on other sites

Let me supplement Retread's post with the relevant FAR cite, FAR 1.108(d). Look at paragraph (d)(3):

(d) Application of FAR changes to solicitations and contracts. Unless otherwise specified –

(1) FAR changes apply to solicitations issued on or after the effective date of the change;

(2) Contracting officers may, at their discretion, include the FAR changes in solicitations issued before the effective date, provided award of the resulting contract(s) occurs on or after the effective date; and

(3) Contracting officers may, at their discretion, include the changes in any existing contract with appropriate consideration.

In my experience, it is not uncommon for a new contracting officer to seek to consolidate contract documents and to insert the current FAR clauses. However, this must be done bilaterally.

It would not surprise me if the contracting officer has not considered the impact of the new clauses. Bring them to his or her attention and identify any consideration you desire.

Share this post


Link to post
Share on other sites

To follow up on Napolik's comment, let me make a point. Consideration and equitable adjustment are not necessarily the same thing.

Generally, an equitable adjustment in accordance with a contract clause is not consideration for agreement to a change. It is compensation pursuant to the contract's terms. Presumably, consideration for agreement to a change under a contract clause was provided at the time of contract award as part of the original agreement. Generally, such consideration is the government's promise to pay the contract price.

A CO cannot update contract clauses unilaterally unless the contract includes a clause that gives the CO that authority. There is no standard clause to that effect.

If a CO wants to update clauses in a contract through a bilateral modification, and if the contractor is willing to do it, the CO must provide consideration in order for any update modification to be binding on the parties.

Consideration is not limited to an equitable adjustment. An equitable adjustment merely compensates the contractor for the impact of a change on the cost of performance, dollar for dollar, plus profit, and for the impact on the time of performance and on other contract terms. Consideration, on the other hand, is not limited to the impact on contract costs or on the time of performance. It can be anything the contractor wants that the CO is willing to provide. If the contractor cannot get what it wants by way of consideration, it can refuse to agree to the update mod. If the contractor is willing to accept mere equitable adjustment, e.g., a dollar-for-dollar cost adjustment, it can do so, and then the "equitable adjustment" would be consideration for the change.

Share this post


Link to post
Share on other sites
Guest
This topic is now closed to further replies.

×