RIR Posted July 13, 2009 Report Share Posted July 13, 2009 In an effort to minimize use of the Standard Procurement System it has been suggested that we issue Change Orders as Letters of Direction, instead of issuing them on the Standard Form 30. These letters would be issued against contracts awarded using FAR 15 Negotiated Procurement. Proponents of this idea point to 43.301 which states that actions processed under part 15 are excluded from the mandatory use of the SF 30. The letters will refer to the changes clause, and basically read like out current change order modifications do. Getting the contractor on board with this idea aside, does anyone see any problems with issuing change orders in this way? Thanks very much. Link to comment Share on other sites More sharing options...
Guest carl r culham Posted July 13, 2009 Report Share Posted July 13, 2009 Does FAR Part 15 authorize the use of a Change Order? I say it does not, the Changes and Changes and Changed Conditions clauses do when incorporated into a contract so to me the action - change order - is processed as an action under the "contract" and it's terms and conditions and not an "action processed under FAR Part 15". Also see FAR 43.201 where reference to FAR Part 15 is curiously absent. Also see FAR 53.243. Wonder if when read together the references mean the FAR Part 15 reference in FAR 43.301 is with regard to using the SF-30 is for amendments to FAR part 15 solictations? Also what would you use for change orders for contracts awarded using processes of FAR Part 13, 14 and possbily 12? Would you not want some consistency instead of saying the form is required for contracts awarded under FAR Part 13, 14 and/12 and not FAR Part 15? Link to comment Share on other sites More sharing options...
Guest Vern Edwards Posted July 13, 2009 Report Share Posted July 13, 2009 Will you have to obligate funds on the change orders? Will you have to definitize the change orders? If so, how will you record the obligation outside of SPS? Do you plan to bypass SPS for the supplemental agreement, as well as the change order? If not, will SPS accept the supplemental agreement in the absence of a record of the change order? If so, what kind of record will you have for future use? How will you establish a link between the change order and the supplemental agreement? Link to comment Share on other sites More sharing options...
Don Mansfield Posted July 13, 2009 Report Share Posted July 13, 2009 In an effort to minimize use of the Standard Procurement System it has been suggested that we issue Change Orders as Letters of Direction, instead of issuing them on the Standard Form 30. These letters would be issued against contracts awarded using FAR 15 Negotiated Procurement.Proponents of this idea point to 43.301 which states that actions processed under part 15 are excluded from the mandatory use of the SF 30. The letters will refer to the changes clause, and basically read like out current change order modifications do. Getting the contractor on board with this idea aside, does anyone see any problems with issuing change orders in this way? Thanks very much. I don't understand the question. How could a change order be "processed under Part 15"? Link to comment Share on other sites More sharing options...
formerfed Posted July 14, 2009 Report Share Posted July 14, 2009 I don't understand the question. How could a change order be "processed under Part 15"? I'm with you. I'm lost. Change orders are covered by FAR 43. Link to comment Share on other sites More sharing options...
Guest Vern Edwards Posted July 14, 2009 Report Share Posted July 14, 2009 Change orders are not issued under FAR Part 15 or FAR Part 43. The are issued under a changes clause. The changes clauses make no mention of "letters of direction." A change order need not be written on SF 30 in order to be contractually valid, but policy requires that they be written on SF30. See FAR 43.301(a)(1)(ii) and 53.243. The mention of FAR Part 15 in FAR 43.301(a)(1) refers to solicitation amendments, not change orders. The consequences of a policy violation: unfavorable comment by a procurement management review team or an IG. That's about it. The idea described by RIR strikes me as silly. Link to comment Share on other sites More sharing options...
RIR Posted July 14, 2009 Author Report Share Posted July 14, 2009 Change orders are not issued under FAR Part 15 or FAR Part 43. The are issued under a changes clause. The changes clauses make no mention of "letters of direction."A change order need not be written on SF 30 in order to be contractually valid, but policy requires that they be written on SF30. See FAR 43.301(a)(1)(ii) and 53.243. The mention of FAR Part 15 in FAR 43.301(a)(1) refers to solicitation amendments, not change orders. The consequences of a policy violation: unfavorable comment by a procurement management review team or an IG. That's about it. The idea described by RIR strikes me as silly. Thank you everyone. I agree the idea is silly, but so is SPS. We sometimes issue 100 mods a week and it can take up to an hour to get just one processed. These change orders are issued as part of a "growth pool" which is already funded in the contract. We'll still do a definitization mod in SPS, but we definitize many changes on one mod. We use another tool to track our UCA's so associating the change order to the definitization mod in SPS won't be an issue. Again, I appreciate everyone's comments. Link to comment Share on other sites More sharing options...
Guest Vern Edwards Posted July 14, 2009 Report Share Posted July 14, 2009 RIR: When you issue a change order under SF30, do you have to process it through SPS before you give it to the contractor, or can you give it to the contractor and then process it through SPS? Pardon my ignorance. I know some things about SPS, but I've never had to work with it. Link to comment Share on other sites More sharing options...
Don Mansfield Posted July 14, 2009 Report Share Posted July 14, 2009 Thank you everyone. I agree the idea is silly, but so is SPS. We sometimes issue 100 mods a week and it can take up to an hour to get just one processed. These change orders are issued as part of a "growth pool" which is already funded in the contract. We'll still do a definitization mod in SPS, but we definitize many changes on one mod. We use another tool to track our UCA's so associating the change order to the definitization mod in SPS won't be an issue. Again, I appreciate everyone's comments. So the original contract obligates funds for change orders that haven't been issued yet? Let me guess, you are contracting for ship repair? Link to comment Share on other sites More sharing options...
RIR Posted July 14, 2009 Author Report Share Posted July 14, 2009 RIR:When you issue a change order under SF30, do you have to process it through SPS before you give it to the contractor, or can you give it to the contractor and then process it through SPS? Pardon my ignorance. I know some things about SPS, but I've never had to work with it. Vern, SPS is what creates the change order (SF 30). The mod is electronically signed with the KO's signature. We typically have verbal authorizations (effective date will be prior to date signed) of our change orders, so they are authorized to do the work before the mod is issued in SPS. Link to comment Share on other sites More sharing options...
RIR Posted July 14, 2009 Author Report Share Posted July 14, 2009 So the original contract obligates funds for change orders that haven't been issued yet? Let me guess, you are contracting for ship repair? Don, Yes, it is ship repair. The changes are issued under an Emergent & Supplemental Growth Pool. Link to comment Share on other sites More sharing options...
Don Mansfield Posted July 14, 2009 Report Share Posted July 14, 2009 Don,Yes, it is ship repair. The changes are issued under an Emergent & Supplemental Growth Pool. RIR, You should know that such practices (recording obligations for changes based on the mere anticipation of changes) violate the Recording Statute (31 USC 1501). I suggest you read the following DoD IG reports: http://www.dodig.mil/Audit/reports/fy09/09-025.pdf http://www.dodig.mil/Audit/reports/fy08/08-083.pdf Link to comment Share on other sites More sharing options...
RIR Posted July 15, 2009 Author Report Share Posted July 15, 2009 RIR,You should know that such practices (recording obligations for changes based on the mere anticipation of changes) violate the Recording Statute (31 USC 1501). I suggest you read the following DoD IG reports: http://www.dodig.mil/Audit/reports/fy09/09-025.pdf http://www.dodig.mil/Audit/reports/fy08/08-083.pdf Don, Thanks very much for the information. Link to comment Share on other sites More sharing options...
Recommended Posts