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Greatly appreciate anyone who doesn't mind taking some time to provide confirmation regarding the following.

We recently were awarded a contract, where labor is on an FFP basis and travel is on a CR basis. Upon review of the contract, it was discovered that the Contracting Office inserted the following verbiage under Section G - Contract Administration Data, "The contractor is authorized partial delivery payments for services, CLINs 0001, 1001, 2001 under this contract. The Contractor may, not more often than monthly, invoice the lesser of 1/12 the total CLIN price or this amount minus the value of any non-conforming services. Specifically, the Contractor shall not invoice for the value of any services not performed due to uncompensated and otherwise unmitigated employee absences impacting services such as leave without pay, extended military leave, and position vacancies."

For the underline to be binding, mustn't FAR 52.216-4 (Economic Price Adjustment - Labor and Material) be incorporated by reference into the contract?

Thank you in advance for any assistance. ^_^

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For the underline to be binding, mustn't FAR 52.216-4 (Economic Price Adjustment - Labor and Material) be incorporated by reference into the contract?

No. Economic price adjustment is a different matter entirely.

The only thing I can think is that payment to you is in some way linked to presence of staff on the job.

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Vern; Appreciate you setting me straight. However, does the Contracting Office have the authority to place such verbiage into the contract which limits the Contractor not to invoice regardless if labor associated with the contract is on a FFP basis?

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Was this verbiage in the solicitation for the award of the contract? We don't know what the services are for but the language discusses not invoicing for services not performed: "Specifically, the Contractor shall not invoice for the value of any services not performed "

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Joel; No, the verbiage was not included in the solicitation. However, the following response was provided by the Contracting Office at the time Q&As were being answered.

Question: The contract will be awarded as a FFP with reimbursable ODCs for a Base Year plus two Option Years. Is it the intent of the Government to pay the entire FFP at the start of the contract or in equal monthly amounts over each of the periods of performances? If equal amounts should the SUPPLIES/SERVICES be identified as "LABOR," the QUANTITY be 12, and the UNIT be Month?

Answer: The Contractor will be authorized interim delivery payments on the basis of 1/12 the CLIN value per month or the value of conforming services performed, whichever is lesser for the FFP CLIN(s). For Travel, the Contractor may invoice not more often than monthly for costs incurred. Due to the design of the Army's entitlement system, GFEBS, any payment made on a variable and/or reoccurring basis, such as services and cost reimbursable line items must use the unit of measure "Job."

I was clearly under the impression that a FFP contract provides for a price that is not subject to any adjustment unless otherwise stipulated?

Appreciate the insight! :)

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Vern; Appreciate you setting me straight. However, does the Contracting Office have the authority to place such verbiage into the contract which limits the Contractor not to invoice regardless if labor associated with the contract is on a FFP basis?

The problem is to figure out what the Section G language means in the context of the entire contract. It's impossible to interpret the language without seeing the entire contract. I don't know what suppositions the CO has made or what he or she is relying upon. If the language was in the contract when you signed it, then you are part of the problem. If the CO inserted the language after you signed it, then it is probably not binding upon you.

There's not much more i can say without having the contract in front of me. As fr the business about an FFP contract not being subject to adjustment, that statement in FAR is very misleading. FFP contracts are subject to adjustment in accordance with the clauses in the contract.

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