JFQ Posted February 17, 2015 Report Share Posted February 17, 2015 I am reviewing some older subcontracts from a few years ago (before my time) and I found one subcontract where the entire contract value was for less than $20K. However, the Prime included in the FAR flowdowns that for all contracts under $100K, 52.242-3, Penalties for Unallowable Costs would apply. FAR 42.709-6 says to use 52.242-3 in all solicitations and contracts over $700K. Even assuming the previous amounts of $650K, $500K, etc. were in effect, clearly a contract of less than $20K would not apply. My question is, in a situation like this where 1) the subcontract's requirement description was incorrect by stating this clause applied to contracts under $100K and 2) where the clause would obviously be inapplicable, does 52.242-3 still apply since it was included in the contract and technically falls under the incorrect terms listed in the contract? Is there a "reverse Christian Doctrine" that does not allow for incorrectly included FAR clauses where they should be inapplicable? or are the included clauses mandatory since they are a part of the contract? Thanks, Link to comment Share on other sites More sharing options...
Retreadfed Posted February 17, 2015 Report Share Posted February 17, 2015 JFQ, why are you concerned with this question? 52.242-3 is not required to be included in any subcontract. Also, have you asked a competent contracts attorney whether the clause is enforceable since it seeks to impose a penalty by contract? Link to comment Share on other sites More sharing options...
Don Mansfield Posted February 17, 2015 Report Share Posted February 17, 2015 JFQ, FAR 42.709-6 does not control what a prime puts in its subcontracts--it controls what an agency puts in its prime contracts. Link to comment Share on other sites More sharing options...
here_2_help Posted February 17, 2015 Report Share Posted February 17, 2015 JFQ, Yes, in certain circumstances the courts have "read-out" certain clauses, which I suppose is like a reverse Christian Doctrine approach. But so what? The fact of the matter is that the parties in question -- prime and subcontractor -- signed the contracts as drafted. They intended to be bound by the clauses, whether or not prescribed by the FAR. Or are you going to claim "mutual mistake"? But again, so what? Are you going to litigate? Because all these nit-picks are legal arguments. Are you willing to spend @ $2 million and wait @ 2 years for a court to rule that your legal arguments have validity ... which is a far-from-certain outcome? Otherwise I suggest the subcontractor chalk this one up to experience, and consider hiring more competent contracts professionals for future subcontract negotiations. (And by "more competent" I mean more competent than the one(s) who reviewed and approved the older ones you are looking at.) Hope this helps. Link to comment Share on other sites More sharing options...
JFQ Posted February 17, 2015 Author Report Share Posted February 17, 2015 Thank you for the responses. They were helpful in realizing the question was irrelevant since its not a FAR concern, it is between the parties. Link to comment Share on other sites More sharing options...
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