Contracting Officer's Discretion

[DingoesAteMyBaby]

So I am bringing a scenario forward to the WIFCON community for discussion and comment. As with any academic scenario there is always a question of 'who writes these things and what real-world event caused this?'. Sometimes truth is stranger than fiction. In this case I am running into difficulty describing to a Contracting Officer what I have always accepted as a basic concept. I have searched but have not been able to locate DAU training or a more expansive analysis which reflects the most basic concept of what I can only equate to "Finality" as discussed in Administration of Government Contracts (4ed, page 60**). The 'finality' I am seeking in this case is that once a contract modification is completed between the parties, that's it. Not 'finality' as it relates to a dispute or a COFD. Both parties move forward and administer downstream accordingly. Without further adieu...

Scenario:

Contracting Officer "A" is administering a CPIF contract. Contracting Officer "B" is assigned by management as an alternate to administer this CPIF contract in the event that Contracting Officer "A" is unavailable. Contracting Officer "A" was recently unavailable to conduct negotiations for a contract change on the CPIF contract, so Contracting Officer "B" conducted the negotiations and reached a negotiated change to the target cost with the Contractor; this negotiated target cost was incorporated into the contract via bilateral modification between the parties and the modification and all supporting documents were signed by Contracting Officer "B". Contracting Officer "B" followed all required processes and procedures to complete the contract modification and the modification was otherwise entirely valid and binding. Upon Contracting Officer "A"'s return he/she reviews the Post-Negotiation Business Clearance Memorandum which describes the negotiations and describes how Contracting Officer "B" used sound business judgement to reach the negotiated target cost. Contracting Officer "A"' fundamentally disagrees with the rationale used by Contracting Officer "B" to reach the negotiated target cost. As a result, Contracting Officer "B" refuses to use the target cost to calculate the Contractor's Cost Incentive Fee (CIF) using the CIF formula prescribed within the contract, and additionally refuses to complete the entire CIF modification and passes the modification to management for adjudication.

Analysis:

Contracting Officer "B", following all applicable required regulations, supplements, policies, and procedures completed a legally binding bilateral contract modification on behalf of the United States of America under his/her authority as described at FAR 1.602-1. Contracting Officer "A", is tasked with using a CIF calculation which does not allow for discretion by the Contracting Officer beyond merely completing the calculation based upon target costs and overruns / underruns for various completed projects.

Question:
Given the task assigned to Contracting Officer "A", what are his/her options in completing the CIF modification if he/she does not agree with the basis for negotiated target costs that were completed by other Contracting Officers?

**For reference:

"Since the government can act only through its agents and employees, it is clear that it will be bound when authorized agents carry out their duties properly. However, government personnel cannot be expected to act only in ways favorable to the United States. Whether resulting from mistakes, negligence, or poor judgment, their statements, acts, or omissions are sometimes contrary to the government's best interests. This may become evident from later reflection or subsequent events, or it may be determined by the agents' advisors, superiors, or successors. In such cases, attempts may be made to avoid the consequences by repudiating or countermanding the agents' acts. Two major concepts are invoked to prevent the government from disowning authorized agents' acts or agreements - thereby making them binding on the government. The first concept is finality; the second is estoppel.

"Finality - The actions of a government employee acting within the scope of his or her employment are the actions of the government itself, and, as with any contracting party, once the government has taken the final step toward committing a contractual act, it is bound by it. Thus, the focus of analysis in this area is on the action of the government employee that contains the elements of finality in the contracting process."

[ji20874]

What do you mean in your question, "...what are his/her options in completing the CIF modification if he/she does not agree..."? Was the modification by Contracting Office "B" completed, or not?

Your question makes it sound like the modification was not completed, but your background makes it sound like the modification was completed ("... was incorporated into the contract via bilateral modification between the parties...").

[DingoesAteMyBaby]

What do you mean in your question, "...what are his/her options in completing the CIF modification if he/she does not agree..."? Was the modification by Contracting Office "B" completed, or not?

Your question makes it sound like the modification was not completed, but your background makes it sound like the modification was completed ("... was incorporated into the contract via bilateral modification between the parties...").

Great question, complicated answer. Okay, so there are two distinctly seperate modifications occurring. The first is let's say modification A00003 completed by Contracting Officer "B" which served to incorporate a contract change and adjusted the target cost. This is the modification that Contracting Officer "A" is not in agreement with; however, Contracting Officer "A" must now do a CIF modification (A00007) where cost incentive fee is determined once the job that was captured in A00003 and other various modificaitons has completed; and lets say the contract hit the target cost. Contracting Officer "A" doesn't agree with the negotiation behind modification A00003 so refuses to complete modification A00007 on the basis that he / she wouldn't have reached the same conclusion and therefore doesn't feel comfortable signing modification A00007 using the target cost from A00003 as a part of the contractually prescribed calculation.

The question is, is this within the discretion of Contracting Officer "A" in executing his/her warranted Contracting Officer duties to complete modification A0007.

[ji20874]

Is the amount of the target cost in dispute between the contractor and government?

Is whether the work was completed successfully in dispute?

Is the agreement reached in modification A00003 by the contractor and government the only reason Contracting Officer "A" won't sign modification A00007? Is there any "rest of the story"?

If the answer to all three is NO, then maybe the contractor should assert its right to the fee by filing a claim under the contract's Disputes clause -- not a voucher, invoice, or other routine request for payment, but a claim. This will move the current contracting officer to resolve the matter or to issue a final decision which the contractor can then appeal to the agency's board of contract appeals. A claim can be filed withoug becoming personal -- it's just business.

[DingoesAteMyBaby]

Is the amount of the target cost in dispute between the contractor and government?

Is whether the work was completed successfully in dispute?

Is the agreement reached in modification A00003 by the contractor and government the only reason Contracting Officer "A" won't sign modification A00007? Is there any "rest of the story"?

If the answer to all three is NO, then maybe the contractor should assert its right to the fee by filing a claim under the contract's Disputes clause -- not a voucher, invoice, or other routine request for payment, but a claim. This will move the current contracting officer to resolve the matter or to issue a final decision which the contractor can then appeal to the agency's board of contract appeals. A claim can be filed withoug becoming personal -- it's just business.

You would hope that there is more to the story. No, simply a case that the Contractor has no issue whatsoever with any of the modifications or the expected CIF. The issue is that Contracting Officer "B" flatly refuses to perform the necessary contract administration duties associated with adjudicating CIF via modification A00007 because he/she does not agree that the target should have ever been adjusted to what it was adjusted to. Is not agreeing with a previous contract action sufficient grounds for refusing to complete a contract modification?

[Don Mansfield]

DAMB,

You're probably not going to find any rules on this. I'll ask the obvious question--why doesn't the Contracting Officer who negotiated A00003 handle modification A00007?

[DingoesAteMyBaby]

DAMB,

You're probably not going to find any rules on this. I'll ask the obvious question--why doesn't the Contracting Officer who negotiated A00003 handle modification A00007?

Good question... So the project in question is assigned to Contracting Officer "A". Because the work effort spans a number of modifications, lets say that this is a C contract (although more appropriately it should be an IDIQ with delivery orders, but maybe a certain somebody thought it up on 'the back of a napkin' and that's how it made its way on contract - yes you know what I'm referring to), and modificaitons A00002, A00003, and A00006 are all applicable to the body of work in question. It just so happens that A00003 was put on contract by another Contracting Officer. So now that the job is done, and the Contracting Officer to which this project is assigned is responsible for adjudicating the CIF via mod A00007, it just makes sense that this is the person who would complete the mod. Conversely, if Contracting Officer "B" were tasked, what could keep him/herfrom making an arguement that he/she does not agree with mod A00002 where the base work was put on contract and also refuses to do the mod because that rationale was accepted when stated by Contracting Officer "A"?

You've got a 3 ring circus on your hands really quickly.

[ji20874]

File a claim.

[DingoesAteMyBaby]

File a claim.

File a claim against who exactly?? The issue is that one ACO is refusing to process a rather mundane contract action because he/she doesn't agree with another ACO's action who also touched the contract. The Contractor doesn't even know that this is an issue. Plainly stated, the question is, to what extent does an ACO have the ability to just say, "I'm not going to sign this because I don't like what another ACO did in administering the contract" and just expect someone else to work their assigned project.

[Don Mansfield]

ji20874 must think you are a contractor.

Contracting Officer A was tasked to do a job by their supervisor, correct? If Contracting Officer A is refusing to do that job, then they need to take it up with their supervisor. If I were Contracting Officer B, I would stay out of it.

[DingoesAteMyBaby]

Don,

Your approach makes sense. Okay, so taking the course of action that the supervisor steps in, what are the supervisor's options? Can the supervisor push this back down and direct Contracting Officer "A" to complete the contract action? If so, does a supervisor have the authority to direct a Contracting Officer to use his / her warrant authority and complete a contract aciton? And what is the consequence to Contracting Officer "A" upon refusal?

[Don Mansfield]

That's an HR question--out of my league.

[Boof]

I think this is silly. The supervisor should encourage A to do his job and award the mod based on the previous mod it being a legal agreement between the Government and the contractor. However, he cannot be forced to do it so the supervisor could use his warrant (if he has one) or find another CO (maybe to sign it. He gets his chance to let A know what he thinks about the refusal at appraisal time. At my agency, the HCA has signed contract actions because the COs would not, but it wasn't over anything this simple.

[ji20874]

Dingoes,

I suppose from your post no. 9 that you're in the Government agency. Are you Contracting Officer "A" or "B"? Or someone else? The answer for the question of what you can do depends on who you are.