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Can someone point me in the right direction on the following issue: we have a construction contract, firm-fixed-price, in which the government dictated certain costs on the SF 1442 base pricing schedule for utility connection fees. We weren't able to negotiate these costs. However, the utility fees ended up being significantly more than what was indicated by the government on the pricing schedule. We had no control over the fees charged to us by the utility companies and were obligated to pay the excess fees in protest to keep the work moving along. We have asked the government for a modification to cover the excess cost of these fees. First a government representative indicated that once we paid all the utility bills they would do a final modification to adjust the amounts to reflect the actual fees. But now the contracting officer's position has come back saying that we agreed to perform the work for that price and we are not entitled to additional payment because the work was within the scope of the contract.

Do we have any grounds in the FAR or case law to convince the government that we are entitled to the excess utility fees?

Thanks.

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alexb,

Your entitlement to a contract mod to compensate you for additional costs is a legal question and you really need to consult an attorney.

Really.

Hope this helps.

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When we used plugged utility cost line items,

1) we had an advance agreement with the utility or had negotiated a fee with the utility (If this is a DoD Installation and if the utilities are privatized, the Government might have a mechanism in the contract with the utilitiy(ies) for pricing such work ahead and then has used the number as the plug number); and/or:

2) we would state in the contract that the plugged number would be adjusted for the actual cost from the utility.

Is this a DoD installation with privatized utilities? Of coyurse, you probably would have elaborated but I will ask anyway - does the line item description or anywhere else in the contract indicate what the plugged number represents or that it is or is not subject to adjustment?

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Joel,

Thanks for your response and sharing any thoughts you have based on what you have encountered. This is a DoD installation with privatized utilities. The line item descriptions (there are a few of them) are for various utility connection fees, including Gas, Power, Water, Sewer, Storm Drain. The items each say "Lump Sum" - the language doesn't indicate whether it is subject or not to adjustment. Apparently the numbers were just plug numbers the govt came up with, not based on any actual proposals that the govt received from the utility companies. We don't know how the govt came up with the numbers, perhaps based on its past experience with those companies on the base.

Here_2_help and others,

To clarify, I am not looking for an expert legal opinion - I'm looking to see if anyone has faced this (or a similar) situation before with govt plugged numbers and whether they were able to convince the govt to adjust the prices, and if so what FAR clauses/cases may speak to this type of issue of incorrect govt-imposed prices. Isn't that what this forum is for? I've seen people give responses here with citation to FAR clauses and cases before. Just looking for anyone that might have experienced this issue and where I can look to get more info.

Thanks.

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Hmm, even though the CLIN's are "lump sum", I would expect to see a note or other description in the statement of work, specificationss/basis of payment , as special contract provision or in the notes for the CLIN's, etc. Hmmmmm.

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Can someone point me in the right direction on the following issue: we have a construction contract, firm-fixed-price, in which the government dictated certain costs on the SF 1442 base pricing schedule for utility connection fees.

What do you mean when you say that the government "dictated" certain costs on the SF 1442? Do you mean that the government estimated what the costs would be? Exactly what did the SF 1442 say? Please quote it.

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Joel,

I searched the RFP for all mentions of prices/pricing, pricing schedule, utilities, etc. and the only language about the CLINs and pricing schedule instructs that the contractor's proposed contract line item prices must be inserted in the appropriate spaces and that prices must be proposed for all CLINs and sub-CLINs. There is language about use of utilities while on site and the costs being reimburseable, but that is based on FAR 52.236-14 addressing temporary utilities needed for construction and site trailer.

CCulham,

Thanks for chiming in and the article. I will look into that duty to see if we can't form an argument there.

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Vern,

The Base Pricing Schedule in the SF 1442 lists each CLIN with description, e.g. "Gas Utility Connection Fee," Unit of Measure "Lump Sum" and either a blank space ($______) for us to fill in the price, or a number already populated in the price line (e.g., $18,000.00). All of the Utility connection fee items have a price already typed into the price column, so there is no blank space. This is what we received in the RFP, with instruction to fill in our prices in all the appropriate spaces. So we filled in the prices next to the items where price was blank, and did not fill in any price for the items where the government had already filled in the price.

Thanks,

Alex

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Vern,

Also, at the bottom of the list of CLINs it says "TOTAL BASE PRICE $ ______________ (ITEMS 0001 thru 0005)," so the total price was based on our filled in prices for each CLIN with a blank price, plus the prices provided by the government for the utility connection fee CLINs.

Thanks.

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My reaction is that the SF 1442 told prospective offerors that the government would pay the stipulated amount for utility connection. That being the case, your proposal assented to that term of the prospective contract and you are bound by it.

You did not identify any language in the RFP that said the government warranted or guaranteed or estimated that the utility would actually charge no more than that amount. Nor did you say that you asked about the amount, why it was there, what it meant, on what information it was based, etc. Nor did you say that you checked with the utilities.

Unless you can show that the government promised you something more than that it would pay that amount, or that it knew that the actual amount would be more but didn't reveal that information to offerors, then I think that you are stuck with the deal that you made.

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Vern, Thanks for your thoughts. I'm wondering what choice we had but to accept the stated numbers (or not propose)? If we had checked with the utilities what would you have suggested we do at that point if the amounts were off?

I'm curious, in your experience have you seen the government dictate pricing before?

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What you could have and should have done is called the CO. You should have asked why the government had inserted an amount in that space and where the amount came from. You should have asked the CO if it was guaranteeing or estimating that the utility would not charge more. You should have asked it you could put your own number in that space based on information you could get from the utility. You should have asked if the government would provide a price adjustment if the utility charged more.

I have never seen the government "dictate" pricing. I have seen them say that they would not pay more than this or that for something.

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