TFC and Excusable Delay

[alexreb]

If during a period that a contractor is excusably delayed (e.g., severe weather), the Government terminates the entire contract for convenience, is the contractor entitled to TFC costs for the period of the excusable delay?

To put it another way, under a FP construction contract the contractor is unable to work for an extended period of time due to severe weather. The delay is considered excusable under the TFD clause (52.249-10). If during the delay the contractor's right to proceed is terminated for convenience by the Government, would the contractor be entitled to the delay costs experienced during the excusable delay period?

Normally the answer is "no", but because the TFC I'm not sure. A TFC settlement of uncompleted work on a FP contract is basically settled on a cost-reimbursement basis. That being the case, would such delay costs that are borne by a contractor prior to a termination be included in a TFC settlement?

[FAR Fetched]

Were any direct billable costs were incurred during the delay?

[joel hoffman]

You didn't explain very well but there are two ways to interpret the situation.

1) Contractor never went to work but was delayed for an extended period due to severe weather. The government terminated during this period.

Or 2) Contractor went to work. After starting, Contractor experienced 'severe weather" delays and government jus happened to TFC during this period.

Either way, you are wondering whether contractor is due any compensation for extra expenses incurred during time lost due to severe weather.

My opinion is that, if contractor can show that it incurred costs during the period, it is entitled to some type of termination settlement. In order to reduce this settlement payment, the government must show that the contractor would have experienced a loss had its finished the project. Then you would adjust the settlement to prorate the settlement to account for the delay period. In that event, the contractor is entitled to his costs, less a loss adjustment.

Otherwise, I would say that valid charges incurred during the delay would be part of the cost incurred during the delay.

[joel hoffman]

You didn't explain very well but there are two ways to interpret the situation.

1) Contractor never went to work but was delayed for an extended period due to severe weather. The government terminated during this period.

Or 2) Contractor went to work. After starting, Contractor experienced 'severe weather" delays and government jus happened to TFC during this period.

Either way, you are wondering whether contractor is due any compensation for extra expenses incurred during time lost due to severe weather.

My opinion is that, if contractor can show that it incurred costs during the period, it is entitled to some type of termination settlement. In order to reduce this settlement payment, the government must show that the contractor would have experienced a loss had its finished the project. Then you would adjust the settlement to prorate the settlement to account for the delay period. In that event, the contractor is entitled to his costs, less a loss adjustment.

Otherwise, I would say that valid charges incurred during the delay would be part of the cost incurred during the delay.

Contractor is expected to bear the risk of cost for adverse weather as well as unusually adverse weather delays, so there seems to be nothing preventing a contractor from including these anticipated costs in its contract price. Therefore, in my opinion, it should be an allowable cost in the event of Termination for Convenience. If this were a request for equitable adjustment, our position (per the Defaults Clause) would be, "You are due time for an excusable delay but no additional cost for the additional delays due to unusually adverse weather". Another way of putting it could be "you have assumed the cost risk and we assume that you priced your contract accordingly."

[alexreb]

Thanks Joel.

This wasn't an actual situation, just something I was wondering about. I never considered a contractor including the cost of potential excusable delay periods in their price. Good point.

I was trying to be brief and to the point, but I guess I just managed to be brief.