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siwilliams

CDRL Review Period and Approvals

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I'm having a disagreement with my government customer about CDRL deliverables, review periods, and approvals. Block 8 of the 1423 is Blank. Block 16 of the 1423 states that the government will have 30 days to review the data submittal and respond with comments and the contractor will have 20 days to revise after receipt of the government's comments. The data item was submitted to the customer. The transmission included DID, SOW, CLIN, and CDRL references as well as the listed government review period. The government confirmed receipt of the data item. On day 40 I sent the government a notification that the review period has expired, the date of expiration, and notification that the Data submittal was now presumed approved by the contractor as we received no comments back on the item by the government. The government says that this assumption is incorrect as the 1423 says nothing about presuming approval.

I argue that the document gives a number of days for government approval. Once that time has expired, unless contractor has received notification that the review period would need to be extended, then the government has not contractual right to additional comments. Realistically, we will likely allow additional comments, however, it's my argument that technically the window of opportunity has closed on that one. The COR asked under what authority and I really couldn't find anything that specifically addressed approvals of this nature except that Dod 50101.12 states that the dates are contractual obligations. Also the instructions for DD form 1423 seem to indicate the same.

Any opinions on this would be appreciated.

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What is the significance of the review period to you? If it is not met will it cause you to be delayed in performing the contract and/or cost you more money?

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Forgive me if this amounts to piling on, but what leads you to believe the government implicitly approved? Hopefully not just the passage of time.

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Yes, could very much result in delays in schedule as well as financial. What is the purpose of identifying a period for review? At expiration of the identified period without comment, what gives the government authority to make additional comments or request additional changes? Per 1010.12 the dates constitute a contractual obligation. the period is set. There may be no implicit approval but the government has effectively waived their right to disapprove.

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Yes, could very much result in delays in schedule as well as financial.

Could? or Does?

If the latter, and if your contract includes the clause at FAR 52.242-17, Government Delay of Work, you might look into using that clause for an equitable adjustment for whatever re-work you have to do. But read the clause carefully before you invoke it, and make sure you comply with the time limits in para. ( b ). There may be other contract terms and conditions that will work in your favor, but you need to find them within your contract.

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what about 252.227-7030? I'm moreso wanting clarification on approvals...there are many deliverables for which we NEVER get a response.

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Yes, could very much result in delays in schedule as well as financial.

Could? or Does?

If the latter, and if your contract includes the clause at FAR 52.242-17, Government Delay of Work, you might look into using that clause for an equitable adjustment for whatever re-work you have to do. But read the clause carefully before you invoke it, and make sure you comply with the time limits in para. ( b ). There may be other contract terms and conditions that will work in your favor, but you need to find them within your contract.

The problem with the time limits in 52.242-17 might be that the actual delay costs may occur long after the failure by the government to review and comment on the deliverable within the time specified in the contract. Apparently the government often only provides feedback long afterward when delays and/or complaints, withholding, etc. occur. When are you supposed to notify the government that they aren't meeting the timeframe specified? Each time they don't or later, when the actual delay and impact occurs because of the earlier omission?

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si, you are inferring that the result of the lack of timely response to CDRL submissions is delays and/or withholding when they finally get around to commenting or griping. It's unclear to me if you are explaining to the government at the time they miss review deadlines the problems that this causes or if you are just in a contest with them over whether or not the lack of response constitutes constructive acceptance. You seem to have communicated with them when they havent complied with their own stated duties. Have you also made them clearly aware of the actual impacts of that inaction (cause and effect)?

Constructive acceptance aside, if the government's failure to meet its contractual obligation is causing time and cost impacts, they need to become aware of this and hopefully work with you to avoid further occurrences.

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si,

Perhaps a more complete statement of your facts and theory would help. Is the deliverable on a NSP CLIN tied to another CLIN? What is the contract type of the CLIN to which it is associated? (In other words, it the CDRL relates to a NSP CLIN, on what CLIN--specifically, its contract type--would the Government withhold payment if you failed to provide the data deliverable?) In Post #6 you seem to introduce course of dealing (to what end, I don't know). Also in Post #6, you reference the withholding of payment clause, but then don't explain how the Government's actions have been inconsistent with that clause.

Edit: Apparently you meant "5010.12," by which I assume you mean DoD (Manual) 5010.12-M, Procedures for the Acquisition and Management of Technical Data. What does your contract say about this?

Edited by Jacques

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The CDRL is NSP. However, acceptance is a requirement for a PBP payment event.

This particular issue has been worked out and we are now invoicing the PBP.

In post #6, I'm now seeking clarification of process and interpretation. The dispute came after I requested authorization to submit the PBP invoice explaining that the government review period has expired (now for over 2 weeks) and I presumed the submission accepted as there was no communication received from the government. I received a response similar to those in post 2-3 asking where in the contract did it express that the submittal is approved if the government does not respond. I referenced 5010.12-M which states that the dates are contract commitments and if either party can't make the dates they should notify/request an extension from the other party. This was not done. The CDRL states on ALL items except one that the government "SHALL" or the government "WILL" have X# days to review/approve. At this point I'm hoping to educate myself on the issue. Even if the response or lack thereof is not tied to a schedule/financial impact, at what point can the contractor check the box on the CDRL? If the government doesn't respond, does that item remain TBD indefinitely? Doesn't seem logical to me? If there is a delivery due date, surely the contractor is held to that date and will be penalized for missing especially if we fail to communicate the delay to our customer. What is the significance of the review/comment period? Is the government not held to the same standard? It would have been easy enough to say they required more time (even after I sent the email). However, the question has now been raised...Is the contractor required to repeatedly remind the government that we're awaiting approval even though the contract explicitly limits the review period? I have worked with a number of government agencies throughout the years - for each of them the process has been as I assumed unless they've communicated otherwise. The 1423 instructions explain that an "A" should be included in block 8 for those CDRLs requiring approval. There is no "A" in block 8 but the cdrl is very clear in block 16 that the item requires approval and the period the government has to provide that approval. What doesn't seem to be clear is the status of the CDRL once that period has expired and there are no comments in either direction from the government.

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siwilliams,

Are you, or are you not, willing to exercise your rights under the contract clause at FAR 52.242-17, Government Delay of Work, or other similar clause in your contract? If you are not willing, then no amount of whining here will help you.

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si, my tendency is to accept the concept of constructive acceptance when the contract states that the government has a certain period to accept or to comment on the deliverable. If the government can simply ignore the requirement, that would render it meaningless.

But I'm not a lawyer and don't presently have the time or resources to research case law, if there is any. There probably is. You've already made the point to them only to be rebuffed

Regardless, you have other avenues within the contract to pursue impacts for government breach of its contractual duties.

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The CDRL is NSP. However, acceptance is a requirement for a PBP payment event.

This particular issue has been worked out and we are now invoicing the PBP.

In post #6, I'm now seeking clarification of process and interpretation. The dispute came after I requested authorization to submit the PBP invoice explaining that the government review period has expired (now for over 2 weeks) and I presumed the submission accepted as there was no communication received from the government. I received a response similar to those in post 2-3 asking where in the contract did it express that the submittal is approved if the government does not respond. I referenced 5010.12-M which states that the dates are contract commitments and if either party can't make the dates they should notify/request an extension from the other party. This was not done. The CDRL states on ALL items except one that the government "SHALL" or the government "WILL" have X# days to review/approve. At this point I'm hoping to educate myself on the issue. Even if the response or lack thereof is not tied to a schedule/financial impact, at what point can the contractor check the box on the CDRL? If the government doesn't respond, does that item remain TBD indefinitely? Doesn't seem logical to me? If there is a delivery due date, surely the contractor is held to that date and will be penalized for missing especially if we fail to communicate the delay to our customer. What is the significance of the review/comment period? Is the government not held to the same standard? It would have been easy enough to say they required more time (even after I sent the email). However, the question has now been raised...Is the contractor required to repeatedly remind the government that we're awaiting approval even though the contract explicitly limits the review period? I have worked with a number of government agencies throughout the years - for each of them the process has been as I assumed unless they've communicated otherwise. The 1423 instructions explain that an "A" should be included in block 8 for those CDRLs requiring approval. There is no "A" in block 8 but the cdrl is very clear in block 16 that the item requires approval and the period the government has to provide that approval. What doesn't seem to be clear is the status of the CDRL once that period has expired and there are no comments in either direction from the government.

siwilliams,

FAR 46.407( g ) states:

Notices of rejection must include the reasons for rejection and be furnished promptly to the contractor. Promptness in giving this notice is essential because, if timely nature of rejection is not furnished, acceptance may in certain cases be implied as a matter of law. The notice must be in writing if --

(1) The supplies or services have been rejected at a place other than the contractor’s plant;

(2) The contractor persists in offering nonconforming supplies or services for acceptance; or

(3) Delivery or performance was late without excusable cause.

Whether a delay in inspection constitutes constructive acceptance is highly dependent on the facts of the case. A delay does not necessarily imply acceptance, but it may. Here are some cases dealing with delay as constructive acceptance:

Board decisions

Lack of inspection w/in 30 days was a deemed acceptance

Fischer Imaging Corp. (2002) VABCA, Nos. 6343, 6344, 6446, 6460 02-2 BCA ¶32,048.

Contract language meaning given to all parts; delay in inspection of equipment

Fischer Imaging Corporation (2002) VABCA, Nos.6125, 6126, 6127, 02-2 BCA ¶32,003.

Contractor not liable for cleanup; delay in rejecting work was acceptance

Work Force Reforestation, Inc. (1990) AGBCA No. 88-180-3, 90-3 BCA ¶23,137.

Govt's failure to timely accept or reject work was constructive acceptance

Lyons Lumber Mill (1990) AGBCA No. 90-136-3, 90-3 BCA ¶23,136.

Overexcavation not accepted by delayed rejection; defect known to contractor

Washington Construction Co. (1989) ENG BCA No. 5318, 89-3 BCA ¶22,077.

Delayed rejection notice not compensable; contractor knew of need to fix welds

Granite Construction Co. (1989) ENG BCA No. 4642, 89-3 BCA ¶21,946.

Delayed govt decision re damaged pavement was acceptance; claim disallowed

Utley-James, Inc. (1987) GSBCA No. 6831, 88-1 BCA ¶20,518.

Failure to reject within reasonable time under circumstances meant acceptance

Tranco Industries, Inc. (1983) ASBCA Nos. 26305, 26955, 83-2 BCA ¶16,679; aff'g 83-1 BCA ¶16,414.

Govt failure to reject riprap after placement was acceptance; work compensable

James W. Misich dba J.W. Misich (1970) ENG BCA No. 2913, 70-1 BCA ¶8198.

Delayed rejection of sealant to seller's prejudice was constructive acceptance

Mastic-Tar Co., Inc. (1962) ASBCA No. 7272, 1962 BCA ¶3365.

You may want to bring FAR 46.407( g ) to the COR's attention, just so they know that there is some potential liability for taking too long to complete inspection.

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Thanks, Don.

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Guest Vern Edwards

siwilliams:

Don's post was excellent, but the issue is complex. A warning: When it comes to complaining about late reviews, don't make too much of a fuss unless the impact is severe. Don't press your point too forcefully, unless the contract is very clear and specific about the standards that the data item must meet to be acceptable. You might find yourself getting timely rejection for every format error, misplaced comma, misspelled word, and vague, ambiguous, or inconsequentially erroneous expression.

This is an old problem. It has not often been litigated, but see Systems & Computer Information, Inc., ASBCA No. 18458, 78-1 BCA ¶ 12946, November 23, 1977, findings of fact 70 and 71:

70. Contractually-required review cycles for Government review of appellant's data submittals were specified by DD Forms 1423, Contract Data Requirements Lists (CDRL's) (R4, Tab 9, Exhibit A). The review cycles for individual documents were not the same. (Id.: Tr. 92, 93). It was of some importance to the contractor that it receive the Government comments according to the contractually-agreed-upon review cycle time. In some cases, without the comments, the contractor could not proceed (Tr. 473). When documents were not reviewed and returned in accordance with the contract's review cycle requirements, the normal flow of assignments and continuity of the contractor's performance were at times disrupted which caused costly inefficiencies in the contractor's data submission efforts (Tr. 845). These delays also disrupted the contractor's planning and scheduling of the availability of technical writers and other technical personnel to review Government comments when they finally were received. As an occasional result, these technical personnel were either under-employed or without work (Tr. 93).

71. On 26 March 1971, SCI responded to a SAMTEC letter stating that SCI was failing to meet schedules. SCI countered by stating that SAMTEC was 35 days late with its comments on Data Item A–009. ‘To date, SCI has not chosen to submit claims for additional costs incurred as a result of Government delays in review of data items, however, continued delays of this magnitude may result in reconsideration of that policy’ (Exh. A–36). The policy was evidently reconsidered, for claims were presented.

That's a complex, 146-page T for C settlement dispute decision in which the late review claim was but one of several. The contractor sought $10,000 for the delays and got $1,000. A small amount, but the issue caused a minor stir where I worked at the time, because some project officers were routinely late when it came to inspection of data items.

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Thanks to all of you for your input. This helps significantly. I now know that I have legal/regulatory standing with regards to my position. Again, not my intent to push the customer unnecessarily on every data submittal, but to respond to the question presented by the COR who seemed to believe that I had no standing. It is also not my intent to "whine" about the situation without action. It is, however, my intent to come to an understanding based on the FAR/legal precedent where the customer is either responding or communicating delays to us related to the reviews.

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SI, in an earlier post, you stated that the late approvals had an impact on PBP, which I interpreted to mean performance based payments. If that is correct, did government approval of the CDRLs constitute achievement of a milestone that entitles you to a payment? Have you looked to see what the PBP clause has to say about what constitutes milestone achievement, or if it has other language that would shed some light on this issue?

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Ah, Retreadfed is writing what I was thinking.

I was interested in the notion that the contractor would need "authorization to submit the PBP invoice" which seems to conflict with both the PBP payment clause 52.232-32 and the DoD User's Guide to PBPs. In my view, the contractor absolutely does not need authorization to submit a PBP payment request (unless it has agreed to such against its own interests). In the payment request, the contractor certifies completion of the payment event. The CO reviews (to the extent deemed necessary) and authorizes for payment. The CO, at his/her discretion, may request the contractor to substantiate the claimed performance.

That's how it is supposed to work, in theory. Interesting how things change in practice....

H2H

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