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huwen119

Payment Delay& Invoice Rejected on FFP contract (service)

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Vern,

I don't read that all the work was accomplished -- I read only that the required monthly report was delivered. huwen119 admits that it did not provide the required staffing early in the month, so that tells me that all the work was not accomplished. But I am hopeful that he or she will answer your question.

huwen119,

The contracting officer may have reasonably rejected the invoice because of "disagreement over quantity, quality, or Contractor compliance with contract requirements." We don't know what kind of service work this was. If this was an order for security guards, for example, and your firm failed to provide the required number of guards on every day of the month, then likely there is no entitlement to full payment even though you submitted the required monthly report and luckily there were no burglaries during the month.

Can you engage the contracting officer and maybe agree on a partial payment?

If you think you are entitled to payment of the full price for the first month even while admitting you did not provide the required staffing, you should read the contract clause at FAR 52.233-1, Disputes, and file a claim. If you think you are entitled to a partial payment for the first month for whatever staffing you did provide, you should read the contract clause at FAR 52.233-1, Disputes, and file a claim.

(I don't know, but I'm assuming this action was under FAR 8.405-2) Maybe for your next quote you might want to add a blurb something like, "This quotation is premised on an understanding that the start date for full performance will be at least thirty days after issuance of the task order."

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Just wondering whether the doctrine of commercial impractibility would be relevant to this situation. It is extremely unlikely, to the point of being impossible, that a contractor could receive a contract award on Friday and be fully staffed with TS-cleared personnel on the next Monday.

My 2 cents.

H2H

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There is so much about this that we don't know, that it is almost impossible to comment intelligently on the issue. For example, we don't know if the solicitation had a requirement that all personnel proposed for performance on this order would have to have a clearance by the award date. We don't know what is the basis for payment. Is it so much for various reports or is it a fixed monthly amount for a specified service with the reports being NSP and secondary to performance of the services. Also, we don't know if there is a service level agreement in place for this order. So many questions.

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Thanks for your kind comments and help.

There are personnel requirements on the SOW (by LCAT) that we shall furnish those personnel when PoP starts. That said, we did not honor what we promised. As Joel/Ji mentioned, that is probably why KO is not happy about performance quality and contractor compliance no matter what the circumstances are.

Due to slow security clearance processes, contractors are indeed facing a great deal of risks. To better perform/fulfill construal requirements, as Ji20874 suggested, adding a blurb to our quote might be something we should consider especially for some LCATs who need Top Secret clearance.

Retreadfed, sorry I am afraid I cannot share much information as I am still learning/observing what government expects us to do. As of today, we are still working with KO and hopefully we can reach some common understanding and moving forward. Thanks again.

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Yes. of course he's still trying to figure it out, because the government contract formation process, as practiced by the typical CO, does not produce a true meeting of the minds. The goal is not to achieve a meeting of the minds, but to get on contract as quickly as possible, without a protest, if possible, and by saying as little as possible to the prospective contractor as one can.

Any CO awarding a contract that requires performance by personnel with top secret clearances should know that such requirements are problematical. Those requirements should be discussed openly, either with all prospective offerors or with the winner after selection, but before award. The CO should strive for agreement on whether and how all positions can be staffed on day one or whether the parties should acknowledge the difficulty and work out a plan to cope.

Only in the government do two parties sign complex contracts having barely spoken to one another before the deal is done. So it doesn't surprise me that huwen isn't sure what's expected of him. Some of that is his fault, but not all of it by any means. The CO has a vested interest in making sure that both the prospective contractor and the government understand what is to be done, and the only way to do that is through face-to-face talk.

Talk, dammit. It is a stupid practice to award service contracts that are complex enough to require a statement of work without first having a long sit-down conversation. It is a stupid practice in which COs routinely engage, because of outdated laws and regulations and because the CO corps is not professional enough to explain that to senior officials of the Executive branch and to the members of Congress, who are not professional buyers and who haven't got a clue as to what constitutes sound professional practice. Very few members of Congress have ever negotiated a government contract or conducted a FAR Part 15 source selection or managed a government contract. Very few administrators of the Office of Federal Procurement Policy have ever done so. Very few agency heads have ever done so.

If the CO in huwen's case did not know that huwen's company would have difficulty staffing a bunch of positions that require a top secret clearance on short notice, then that CO is a fool.

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Vern, I cannot disagree with your overall assessment. However, I do not place all the blame on the CO. Huwen's company entered into a firm fixed price (bet the company) contract. Before doing so, it would be incumbent upon company management to understand what they are getting into and what risks they are facing. From what huwen has told us, it does not appear that the company did proper due diligence before submitting a quote for this effort and now it is paying the price for that failure. This is an all too frequent occurrence in my experience of contracting officers who do not know what they are doing awarding contracts to contractors who do not know what they are doing.

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I agree that it's not all the CO's fault. However, it can be hard for an offeror to figure out what they're getting into when the CO won't talk to them and you have to prepare a proposal while waiting for the Q&A amendment. Businessmen have to take risks and trust to their ability to work out problems on an ad hoc basis as necessary. See Macaulay, "Non-Contractual Relations in Business: A Preliminary Study," 28 American Sociological Rev. 1-19 (1963). https://media.law.wisc.edu/s/c_8/wcwmt/non-contractual.pdf

One purchasing agency expressed a common business attitude when he said, "If something comes up, you get the other man on the telephone and deal with the problem."

Both huwen and the CO either knew or should have known that there would be a problem about security clearances, and they should have reached an accommodation about it before performance began and an invoice was submitted and rejected. What happened is what happens when a business tries to do business with a bureaucracy.

But the real fault lies with the government contract formation process under CICA and FAR Part 15, which makes a true meeting of the minds too difficult to achieve.

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BC used to say that when a business seeks to do business with the government, the business needs to realize that the government doesn't do business. The government does government. The way to successfully do business with the government is to do government.

Kind of makes me wonder why 1102s need a business degree. Perhaps they should be required to have a degree in government.

H2H

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My perception is that today's youth and many adults would rather communicate and even carry on conversations via text messaging than use the telephone or- horror of horrors- have a face to face conversation or a detailed negotiation. Bits and bytes. That is not to say that there was much more inclination for many government employees to conduct meaningful discussions, price negotiations or obtain clarifications when something wasn't clear, before sound bite communications became so prevalent.

I realized this morning that I haven't written any letters for many years - sad...

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Joel:

This is off topic, but...

I have bought four old manual typewriters and use them to write letters. My handwriting is not as clear as it was when I was in practice, and the manual typewriter produces something that looks more personal than a computer-printer product. It's slow, but kind of fun. Interesting to hear the wap-wap of the type striking the paper, like in an old movie. I keep my letters short, though. I'm not as good with a manual typewriter as I once was. But a few mistakes add to the personal touch. I buy the ribbons on Amazon.

Vern

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