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prodigalko

Effect of term extension mistakenly using 52.217-8

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After reading the GAO report 674849 regarding extensions utilizing 52.217-8 exceeding the limitations of the clause, I was interested in a question that was not addressed in the report.

Specifically, if a predecessor CO (no longer at agency) exercises an option for one year (extends the term), but mistakenly cites 52.217-8 on the SF30, but otherwise acts as if they had cited 52.217-9, can performance continue?

Facts supporting intention to extend term: informal email to the contractor, but no formal notice as required by 52.217-9; utilization of rates for next option year (not at current rates); continuation of performance past six months; 12 month extension completed in contract writing system.

Contract is currently outside of limitations of 52.217-8, but not 52.217-9, due to extension beyond six months, but there is remaining time on the latter clause.

While previous threads have outlined that a contract can continue past the period of performance if all the obligations of either party have not been met (before final payment), I am interested in the ability of a successive CO to continue utilizing the contract and whether that is sound.

Possible approaches to the issue - from Contract Attorney's Deskbook ch. 21 "Constructive Changes" - Adopt; Reject; Adopt, but deny change exists.

1. Treat the mutual mistake on the part of the CO and the contractor (who keeps performing as if 52.217-9) as constructive modification to the contract. Modification to correct the mistake and proceed. This relies on the common law detrimental reliance and extrinsic evidence being allowed in despite patent ambiguity of incorrect clause citation. This seems like the more pragmatic answer.

2. Treat the extension as improper and re-solicit. Due to the fact that 52.217-8 was already used, and for a period longer than six months, a break in service will result. This seems like the more correct answer given the patent ambiguity and resulting duty of the contractor to seek clarification. If extrinsic evidence is excluded this is also the likely result.

3. It does not seem like adopting the change, but denying a change is an option here.

Given that no dispute currently exists and both sides agree that the term was extended (through continued ordering and performance), is it improper to proceed under approach 1? Utilizing the approach from the GAO report cited above it seems like it may be appropriate after corrective action including training (despite the responsible employee's departure). It was unclear in the report if GAO directed any action for contracts that were currently being performed, or in the future should the situation arise again. This avoids an interruption in performance, and a possible loss (based on common law and contra-proferentum, despite patent ambiguity) in case of dispute.

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Just do a new unilateral administrative modification and say that the authority box in the previous modification was incorrectly cited as -8 and Is herewith changed to -9.

It's that easy.

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