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Hello!

I have a scenario and respectfully request your opinion:

  1. Contractor X performing under a Task Order for commercial services.

  2. The Contracting Officer VERBALLY authorizes additional work within scope of the contract.

  3. Contractor X completes the work and performs satisfactorily.

  4. Contractor X submits their invoice under WAWF.

  5. KO recommends rejection of the invoice because a contract modification to capture the additional work (VERBALLY AUTHORIZED) was not yet processed by the Government.

Is the invoice rejection justified? If yes, what’s the authority?

Thank you.

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Sal,

First, I recommend you email the contracting officer notifying them that you are aware of your invoice being rejected and would like to understand why was it rejected as you performed the effort authorized by the contracting officer. If you are unable to receive a response you can always file a claim.

In the future, I would recommend requesting the contracting officer to put their verbal direction in writing  prior to start working. At a minumum, you should put an email together documenting your discussion with the contracting officer and request acknowledgement of receipt prior to start working. This will strengthen your case if a claim is required and it becomes a battle of he said she said and reduces any potential ambiguity.

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The Contracting Officer (KO) is not denying the verbal approval (e-mail direction to proceed is on file)....The KO is saying that absence of a contract modification capturing the change; the contractor cannot submit his invoice however the work was authorized and completed satisfactorily. The issue here is why the contractor should wait for the government to process a modification while he already fulfilled his contractual obligation? What if it takes the government a month to process the modification...? Thanks.

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4 hours ago, Sal said:

The Contracting Officer VERBALLY authorizes additional work within scope of the contract... KO recommends rejection of the invoice because a contract modification to capture the additional work (VERBALLY AUTHORIZED) was not yet processed by the Government.

If the oral direction added work, then I presume that it increased costs. If it increased costs, then the CO must process a written mod in order to adjust the task order value and obligate additional funds with which to pay the additional cost.

If you invoiced for an amount that includes the additional cost, even though the written task order still reflects the original amount, then the invoice was necessarily and properly rejected. The "authority" is that you cannot invoice the government in an amount in excess of the current value of a task order. Read your contract.

You should have known all this and made sure that the CO had started the paper work before you were ready to invoice. Think about who your customer is. It's the Government!

Don't freak out. I presume that you and the CO have agreed on the additional amount. If so, just call the CO and ask how long it's going to take to process the mod. It's probably going to take a while. If you haven't agreed on the cost, then it's going to take a long while.

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I'm with Vern -- the invoice was properly rejected. If the parties are working on a modification to be signed bilaterally to change the work, then the invoice has to wait for the modification to be processed.

The contractor could have chosen not to do the work -- after all, I'm supposing the contract is a commercial item contract containing the clause at FAR 52.212-4, which says that "[c]hanges in the terms and conditions of this contract may be made only by written agreement of the parties." The contracting officer had no authority to orally authorize additional work, and the contractor has no right additional payment.  If the parties ever get around to formalizing the modification, well, then the contractor can seek payment.

It might be that the modification is never finalized -- if so, the contractor might be out of luck.  Think about it -- the contracting officer might have to do an after-the-fact justification for exception to fair opportunity (depending on the nature of the "additional" work) and get a funds authorization -- the contracting officer will have to explain why he or she didn't follow agency procedures --  the contracting officer might be unsuccessful in forcing his or her agency superiors to play along, and the modification might not happen.  What then?

Edited by ji20874
changed "verbally" to "orally"

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So, Sal I suggest that you call the CO and ask…….

Are you not paying my invoice because you (the CO) have not completed the paperwork and process to obligate the money in “the system” that would allow payment and that you (the CO) will pay my invoice when you (the CO) have completed that process or is there another reason you (the CO) are not paying? 

Like Vern says if there is not another reason then don’t sweat it, if there is another reason then you will know what to do.

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I'm with Vern. That's some good advice, right there. I would add that you can invoice up to the current task order price right now and that invoice should be paid promptly.

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Understood...this situation is merely due to an administrative burden beyond the KO’s control...there is no conflict or claim here...it is the price of doing business with the Government. The service provider will eventually get paid for the additional work.

Thank you All for your time and contribution.

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4 hours ago, ji20874 said:

The contracting officer had no authority to verbally authorize additional work,

KOs can verbally authorize additional work for 52.212-4 contracts.  But  the authorization would only be considered an offer made by the Government and not a change in the contract’s terms and conditions (and therefore not payable).

Doubtful but also possible, there could be language in the Task Order or underlying contract pre-authorizing and agreeing to certain verbal changes.
 

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6 hours ago, Sal said:

The Contracting Officer (KO) is not denying the verbal approval (e-mail direction to proceed is on file)....

This seems to indicate that the direction was written instead of verbal.

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19 hours ago, Retreadfed said:

This seems to indicate that the direction was written instead of verbal.

It was a verbal; and I just wanted to clarify that the KO is not denying what happened. My take away is without of a TO modification to capture the additional work, the invoice rejection is justified.

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Point of order regarding "verbal." What Sal means is oral. While modern dictionaries say you can use verbal to mean oral, it's a matter of what Bryan Garner calls "slipshod extension."

See Garner, Garner's Modern English Usage: The Authority on Grammar, Usage, and Style, 4th ed. (Oxford University Press,  2016):

Quote

verbal; oral. Verbal = (1) of, relating to, or expressing in words, whether written or oral, or (2) of, relating to, or expressed through the spoken word. Oral = (1) of, relating to, or involving the mouth; or (2) of, relating to, or expressed through the spoken word.

May regard sens 2 as the exclusive province of oral, preferring that verbal not be used in this way. It's a matter, they might say, of SLIPSHOD EXTENSION. In fact, given the primary sense of verbal, the movie producer Samuel Goldwyn, wasn't really very ironic when he remarked, "A verbal contract isn't worth the paper it's written on." After all, a written contract is verbal. The phrase requires oral.

The slippage is especially acute when verbal is opposed to written--e.g., "Take care with words, verbal [read oral] and written." Sydney Omarr, "Horoscope," Wash. Post, 22 June 1997, at F2. Take care indeed!

In recent years, some people have said that they feel awkward using oral because or prurient connotations; that is, the word seems most often to appear in reference to oral sex. Why this should be so is hard to fathom, since we have oral surgery and oral reports, not to speak of oral communications. If you think of oral in a narrow sexual sense, you should wash your mouth out with soap. Otherwise, we may be in danger of losing a perfectly good word.

Bryan Garner is the editor-in-chief of Black's Law Dictionary and the author of many books about English usage and legal writing.

Sal meant that the direction was not in writing, which is the heart of his problem. (Although the mention of an email being "on file" raised a question.) The proper word, especially for contracting practitioners, is oral.

NOTE: "Calling a spider an insect [or bug] is slipshod extension of the word insect: a spider is an arachnid. Calling a whale a fish is slipshod extension of the word fish: a whale is a marine mammal." See http://data.grammarbook.com/blog/definitions/slipshod-extension-2/.

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I'll second Vern's point of order.  For those of you who may think that his point of order is nitpicky, read George Orwell's essay Politics and the English Language (attached to this post) and then see if you think differently.  Word choice matters.  See the following opinion article from the NYTimes just this morning regarding the use of the word "collusion":

https://www.nytimes.com/2017/11/02/opinion/collusion-meaning-trump-.html

HonorsOrwellPoliticsEnglishLanguage.pdf

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Mathew:

Funny that you should mention the NYTimes article on collusion. I just sent the following letter to the editor of the NYTimes, with a copy to the author of the article:

Quote

To the Editor:

I was mystified by Prof. Goodman's Nov. 2 article complaining about popular use of the word collusion in connection with the suspicion that the Trump campaign and Russians did something to deceive and mislead American voters. He thinks the word collusion is virtually meaningless.

Prof. Goodman asserts that collusion is not really a legal concept. But collusion is quite clearly defined in Black’s Law Dictionary 10th. One of the definitions is: “An agreement to defraud another or to do or obtain something forbidden by law.”

According to Garner’s Dictionary of Legal Usage 3d, collusion means “An agreement  between two or more persons to defraud another.”  He defines collusive as “relating to or involving a secret agreement or understanding for illegal  or deceitful ends.”

Contrary to what he said about the word appearing in only one place in the “federal code” and only in the area of antitrust law, collusion and its variants appear in 22 titles of the United States Code, and in even more titles of the Code of Federal Regulations, in connection with many legal matters. Under American law, collusion is expressly illegal in many contexts.

Collusion has appeared in the holdings of 87 federal court decisions and 74 state court decisions. It appears in 273 places in Restatements and Principles of the Law and in the titles of 80 law review and journal articles.

Collusion is no more imprecise than many other frequently used legal terms, like contract. Prof. Goodman said, “We have now surely lost touch with any reasonable sense of what ‘collusion’ means.” Who is “we”? Politicians and the media—those paragons of precise usage?

Reasonable citizens might reasonably and  understandably suspect that members of the Trump campaign colluded (conspired, collaborated, or worked) with Russians to defraud (harmfully deceive) the voting public and that such collusion would constitute a high crime or misdemeanor.

In the eyes and ears of the average person, collusion is pretty bad. It seems bad to me. Maybe I just missed Prof. Goodman’s drift.

Sincerely,

Vernon J. Edwards

The article was very sloppy.

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