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NinNinVT

The Missing Essential Element of a Contract in a Quote

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2 minutes ago, Matthew Fleharty said:

If so, that would conflict with FAR 15.208(e), which states "Proposals may be withdrawn by written notice at any time before award."

Yes, and FAR 52.215-1(c)(8).

So may a CO insert an instruction in a solicitation requiring a proposal to be irrevocable for a specified period?

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On 11/7/2016 at 5:29 PM, Vern Edwards said:

FAR agreements are not contracts because they do not embody promises. Neither party to any of the agreements described in FAR (BA, BOA, BPA) promises to do anything, so neither party is obligated to do anything. The government does not promise to buy and the firm (not "contractor") does not promise to sell.

This is what prompted my question. Assume a BOA contained a term whereby the firm promised to abide by the terms and conditions of the BOA when performing orders. The Government wasn't obligated to buy anything, the firm was not obligated to sell anything and either party could cancel the BOA at any time. The "promise" would not be contractually enforceable because there was no consideration. There's no exchange of promises, just a one-way promise by the firm.

Would you say that the "promise" in the BOA is not really a promise? 

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7 hours ago, Don Mansfield said:

This is what prompted my question. Assume a BOA contained a term whereby the firm promised to abide by the terms and conditions of the BOA when performing orders. The Government wasn't obligated to buy anything, the firm was not obligated to sell anything and either party could cancel the BOA at any time. The "promise" would not be contractually enforceable because there was no consideration. There's no exchange of promises, just a one-way promise by the firm.

Would you say that the "promise" in the BOA is not really a promise? 

You say "the firm promised." Thus, what you have described is not a FAR agreement. FAR 16.703(a)(3) says that BOAs are not contracts. Since contracts are promises, that means that BOAs do not include promises. FAR 16.703(a)(1) says that BOAs include terms that apply to "future contracts."  Thus, they describe promises that will be binding when orders are accepted. FAR 16.703(d)(2)(ii) says that ccontracting officers shall "Incorporate by reference the provisions of the basic ordering agreement" in orders against an agreement. That being the case, and since the firm need not accept an order, what purpose would the so-called "promise" serve that would not be served by the order itself?

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The BOA would say: "The firm hereby promises to abide by the terms and conditions provided herein when performing orders issued under this BOA."

By "really", I mean pursuant to the definition of "promise" that you provided. 

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5 hours ago, C Culham said:

Thanks Vern I especially appreciate you sharing the Black's reference, confirms my memory has not strayed too much yet!!!!!!

 

I hope we did not stray too far For the Beginner Only.   I am always interested in feedback from an OP and hopefully in the case of this subject area and with regard to this specific thread NinNinVT will let us all know if we dazed and confused or actually helped.

Although the discussion went deeper than what I needed for the purposes of my original question, I do appreciate the deeper dive made available to me as long as the BLUF answer was stated.  The concepts as further discussed are understandable and relevant to the broader understanding of the topic.

Thanks!

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46 minutes ago, NinNinVT said:

Although the discussion went deeper than what I needed for the purposes of my original question, I do appreciate the deeper dive made available to me as long as the BLUF answer was stated.  The concepts as further discussed are understandable and relevant to the broader understanding of the topic.

Thanks!

Good job WIFCON team!  Thanks for the feedback NinNinVT.

4 hours ago, Vern Edwards said:

Yes, and FAR 52.215-1(c)(8).

So may a CO insert an instruction in a solicitation requiring a proposal to be irrevocable for a specified period?

Since the prescription for FAR 52.215-1 requires contracting officers to insert the provision "in all competitive solicitations..." and the requirement for the proposal to be "irrevocable for a specified period" is in conflict with the requirements of the provision, I'd look to FAR 1.4 "Deviations from the FAR."  The circumstances here would likely meet paragraphs ( c ) and/or (e) of the Deviations definition under FAR 1.401.  Therefore, unless a Deviation is obtained, my answer is no.  If a Deviation is approved, I say yes.

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11 hours ago, Vern Edwards said:

Not all promises are binding if accepted. By "binding" I mean enforceable in court. For example, unlawful promises (e.g., to murder someone) are not binding. Beyond that, the authorities are not all in agreement. Under some theories (e.g., the "subjective approach), promises that are obviously not serious might not be binding. ‥. Promises based on obvious errors might not be binding.

There are many treatises about what promises are binding and what promises are not. See, e.g., Restatement § 2, Comments d, Promise of event beyond human control; warranty and e, Illusory promises; mere statements of intention.

 

This is an area I find difficult to understand and explain, especially as it relates to contracts. 

Some so-called 'contracts' are not actual contracts (e.g. instances where a contract may be legally unenforceable - no contract existed). And some actual contracts are not binding [enforceable in court] and may be excused (e.g. commercial impossibility, commercial impracticability, etc.).

This is a lot to consider. I think its time to develop a contracting officer duty pay … it will help fund some of the professional materials --namely books-- I personally procure.

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4 hours ago, Matthew Fleharty said:

Since the prescription for FAR 52.215-1 requires contracting officers to insert the provision "in all competitive solicitations..." and the requirement for the proposal to be "irrevocable for a specified period" is in conflict with the requirements of the provision, I'd look to FAR 1.4 "Deviations from the FAR."  The circumstances here would likely meet paragraphs ( c ) and/or (e) of the Deviations definition under FAR 1.401.  Therefore, unless a Deviation is obtained, my answer is no.  If a Deviation is approved, I say yes.

I agree.

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12 hours ago, Vern Edwards said:

I agree.

Vern/Matthew - Sitting on the fence with this clarification.

The deviation would be required for a  non-commercial item procurement which utilizes FAR 52.215-1 but if for commercial item and FAR 52-212-1 is used no deviation is required as tailoring of the provision is permitted if the part tailored is consistent with commercial practice.  

To add the language of FAR 12.302 strongly suggests that if irrevocable offer is a commercial practice across the board requiring a irrevocable offer is required unless a waiver is obtained.   .  

 So from where I sit (on the fence) it would seem that for a FAR Part 15 procurement a  offer is to be one that is firm if the Government wants to accept it as is yet allows the offeror to withdraw the offer before the Government makes award.  Dare I say in Federal contracting pursuant to  FAR Part 15 offers are contingent irrevocable offers?  And, is a practice that  CO could not change without a deviation.  

However under a FAR Part 12 procurement an agency could (maybe even must) provide that offers are irrevocable and a CO could do so as a tailor and no deviation is required.

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22 hours ago, C Culham said:

 So from where I sit (on the fence) it would seem that for a FAR Part 15 procurement a  offer is to be one that is firm if the Government wants to accept it as is yet allows the offeror to withdraw the offer before the Government makes award.  Dare I say in Federal contracting pursuant to  FAR Part 15 offers are contingent irrevocable offers?  And, is a practice that  CO could not change without a deviation.

Hi Carl,

Sorry for the delay in response.

Under FAR Part 15, an offeror can modify or withdraw its offer after the solicitation closing date,  but may not revise its offer unless the CO decides to conduct discussions. See the definitions of modification and revision in FAR 15.001. I'm not sure what "contingent irrevocable" means. Does it mean irrevocable unless withdrawn? If so, I'm not sure that makes sense, and I think it might cause some confusion.

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On Wednesday, November 09, 2016 at 2:16 AM, Matthew Fleharty said:

Since we're on the subject, I'm curious to hear your take on the "Elements of a Contract."  Depending on the author/source, I've seen them range anywhere from four to seven elements.  The list I keep and share has six:

  • Offer
  • Acceptance
  • Consideration
  • Legality of Purpose
  • Competent Parties
  • Mutuality (aka Clear Terms & Conditions)

Bob recently posted on this topic: Existence of a Contract, Establishing Four Elements

In order to establish the existence of a contract with the Government, appellant must allege and establish four elements: “(1) mutuality of intent to contract; (2) lack of ambiguity in offer and acceptance; (3) consideration; and (4) a government representative having actual authority to bind the United States in contract.” Anderson v. United States, 344 F.3d 1343, 1353 (Fed. Cir. 2003); See City of El Centro v. United States, 922 F.2d 816, 820 (Fed. Cir. 1990); JRS Management v. Department of Justice, CBCA 2475, 12-1 BCA ¶ 34,962, at 171,876 (citing Trauma Service Group v. United States, 104 F.3d 1321, 1325 (Fed. Cir. 1997)).

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