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Default Clause to extend Period of Performance

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Would like to start a discussion concerning the use of the Defaults Clause 52.249-10 in construction contracts for the authority to extend the period of performance. From what I have researched so far, my position is that the sole use of the Defaults Clause is not correct, the Contracting Officer may have to use 52.243-4 (Changes) or even 52.236-2 (Differing Site Conditions).  It is my belief that the Contracting Officer must consider what caused the delay(s) per say to extend the period of performance.  What I do not understand 100 percent is why would the Default clause be used.  This clause is for when the contractor is or could be in default of the contract because they refused or failed to proceed/progress in a timely manor.  My view is the clause is used for possible termination, why else would it be prescribed to be included in a contract under FAR Part 49 "Terminations" 

It would be nice if someone had a decision by a JA authority or Direction that supports the use of, or not to use the Defaults clause as I can not find any and this subject always appears to be more of a matter of opinion than something that sits on solid ground.  I have even had IG state that the Defaults clause is to be used but then give no creditable documentation to support this.   

 

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The Default clause, FAR 52.249-10, mandates time extensions in recognition of excusable delays, such as those listed in paragraph (b). The Default clause does not mandate or authorize time extensions for other reasons. That should be apparent from the plain text of the clause. I'm not sure what there is to discuss.

Generally, a CO would not need a JA (i.e., J&A) or express authority merely to extend the time for completion of a completion-type contract at the contractor's request, since merely extending the completion date would not constitute a new procurement. What the CO would need is consideration for granting such an extension.

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Paragraph (b) of the clause provides for a time extension for various enumerated excusable delays. It doesn’t address monetary relief for such excusable delays. For the time extension to be compensable would generally require coverage under another clause.

For instance, the Suspension of Work clause authorizes a cost adjustment for a government delay of unreasonable length (assuming that the delay cost isn’t otherwise concurrent with an unexcused contractor delay). However, it doesn’t authorize a time extension.  The Defaults clause is used to provide the associated time extension. 

Thus, both clauses are cited in the mod providing a cost adjustment and a time extension due to a government ordered or constructive delay to the completion period. 

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Vern and Joel,

thank you for your responses.  Whereas I do agree that if the time extension is granted for one of the excusable delays as outlined in (b) and that there is to be no compensation, unfortunately I should have been a little more detailed in my original post.    My apology.

I have had at least three instances where IG inspectors and even the squadron DBO have stated that the Changes clause 52.243-4 does not allow for extensions of the period of performance and that ONLY the Default clause does, basically they have stated "the only clause that authorizes an extension of the period of performance is the Default clause."  They take the position, that point blank if you allow a time extension to the period of performance you must use the default clause, if you use any other clause as the authority it is incorrect.  My stance is that this is not totally correct when dealing in a construction contract, that the contracting officer must review all the facts concerning if an extension of time should be granted and apply the correct clause as the authority to make such change.

Changes Clause 52.243-4 allows for changes in the period of performance along with an equitable adjustment.  Changes can be made within the general scope of the contract, including changes--(1) in the specifications, (2) method or manner of performance of the work, (3) In the government furnished property or services (4) directing acceleration in the performance of the work.  At (d) it specifically states "if any change under this clause causes an increase or decrease in the Contractor's cost of, or the time required for, the performance of any part of the work under this contract, whether or not changed by any such order, the Contracting Officer shall make an equitable adjustment."

Further the Differing Site Conditions (52.236-2) also allows for a time extension of the period of performance and an equitable adjustment "(b) The Contracting Officer shall investigate the site conditions promptly after receiving the notice. If the conditions do materially so differ and cause an increase or decrease in the Contractor’s cost of, or the time required for, performing any part of the work under this contract, whether or not changed as a result of the conditions, an equitable adjustment shall be made under this clause and the contract modified in writing accordingly."

Case in point; drawings for fire system installation in a building being renovated, identified installation layout above the ceiling.  Ceiling was constructed of sheetrock and upon removal of the ceiling it was identified that there was a significant sized metal beam (support beam) that could not be removed or modified and that the fire system would need to be reconfigured and redesigned due to the metal beam.  Anytime you change a fire system from the original design you must accomplish a redesign as you must re-calculate what the quantity flow will be.  Taking this situation into consideration would it be appropriate under the changes or differing site conditions clauses?  I would see it as a differing site condition, although it could possibly be argued as a being under the changes clause.  I am unable right now to see how the additional work and time required for this would be considered under the defaults clause, yet this is how the inspector viewed it simply because of the extension in the period of performance.  

I have been working in construction contracting sense 2005 and the biggest area where changes occur are due to differing site conditions or very poor specifications and drawings.  I have yet to have any situation as described in the default clause as a reason to extend the period of performance. 

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The IG is wrong if they say that all time extensions are issued under the defaults clause.  Who are these people anyway? What is their background and their experience level?

I dont have have time this afternoon to go into detail about your example  

 

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On 12/9/2017 at 12:48 PM, Construction CO said:

I have had at least three instances where IG inspectors and even the squadron DBO have stated that the Changes clause 52.243-4 does not allow for extensions of the period of performance and that ONLY the Default clause does, basically they have stated "the only clause that authorizes an extension of the period of performance is the Default clause."

The following is from FAR 52.243-4(d):

Quote

If any change under this clause causes an increase or decrease in the Contractor’s cost of, or the time required for, the performance of any part of the work under this contract, whether or not changed by any such order, the Contracting Officer shall make an equitable adjustment and modify the contract in writing.

We're talking Contracting 101---a matter of plain English. There are professional books that discuss this matter. See e.g., Administration of Government Contracts 4th. If your IG and DBO (whatever that is) told you that the Changes clause does not authorize a time extension under any circumstances, they are simply not qualified for their jobs.

I still don't see what there is to discuss, other than the professional ignorance of some of your organization's staff. Of course, there is always that chance that you have misrepresented or incompletely reported their views. We're hearing only your side, and as you've already acknowledged, you previously failed to relate all of the pertinent facts.

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Con CO, don't forget that the procedures in the Changes clause apply to constructive changes as well as ordered changes.  I agree with Vern that if what you say is accurate, whoever told you that does not understand government contracting.

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Construction CO:

In your second post, you wrote:

Quote

IG inspectors 

I assume you mean Inspector General auditors or analysts.  If so, they are usually generalists who must prove to you that they are correct.  They sure don't sound like they are, if what you describe is accurate.

You also said:

Quote

squadron DBO

That may require some legal support to educate them.  Go Here:  U. S. Court of Claims.  Where it says keywords, type in the name of your clause and read the cases.  For example, "changes clause."  Also go here:  Armed Services Board of Contract Appeals.  In the search box to the left, type the name of your clause.  You can also use the Civilian Board of Contract Appeals.  

 

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@Construction CO:

I recommend against researching and reading cases.

Look, the plain language of the clauses supports your position about time extensions under the Default clause. You don't need any $&*# cases. Tell those people that if they can't understand the simple English of the clauses to read a book on the subject, like Cibinic, Nash and Nagle or Nash and Feldman.

Keep in mind, however, that you may not correctly understand the point that they are trying to make. So make sure that you do before you tell them to get lost.

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6 hours ago, Vern Edwards said:

If your IG and DBO (whatever that is) told you that the Changes clause does not authorize a time extension under any circumstances, they are illiterate, consequently ignorant, and simply not qualified for their jobs.

In the Air Force, DBO is Director of Business Operations (the Chief of Contracting Office or COCO).

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Jamal:

If that is so, that is why CO might find case examples helpful.  CO asked for a decision to support his/her understanding of clauses and to convince others he/she is correct in his/her reading of clauses.  I provided access to decisions of the COFC, ASBCA and CBCA that CO might find useful.  I don't know if CO will find those sources useful but CO can decide.  Vern's opinion may be a good one--telling "squadron DBO" that if they can't understand the simple English of the clauses to read a book on the subject.  Of course, I don't know how "squadron DBO" would react.  CO will have to decide on that too. 

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Construction CO, were the DBO and the IG describing the applicable clause or clause in reference to your example of the redesign of the fire suppression system?  

I could see where the applicable clause for a time extension due to delays to the critical path of the schedule between the time of the discovery of the beams above the ceiling and the time it took to redesign and issue a change to construct the revised design would be under the defaults clause and associated delay costs (but no profit) would be paid as a constructive or ordered partial suspension of work. I’d have to do some research to see whether that also applies to delays for redesign time due to a differing site condition. 

But I won’t spend the time   searching my files and CAB resources if that isn’t the context of their opinion. I used to subscribe to “Construction Claims Monthly” and to various textbooks on construction delays and yearly updates but didn’t retain them all when I retired from full-time contract admin, mods, claims, and source selection. 

I will say that I read some case law or Nash and Cibinic, etc. on how to handle situations where the contractor is delayed waiting for the government to issue a revised design. Any additional time and equitable adjustment for difference in costs to construct the revised design versus the time and cost to construct the original design would be covered under the Changes or Differing Site Conditions clause(s).  

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On 12/9/2017 at 12:48 PM, Construction CO said:

Case in point; drawings for fire system installation in a building being renovated, identified installation layout above the ceiling.  Ceiling was constructed of sheetrock and upon removal of the ceiling it was identified that there was a significant sized metal beam (support beam) that could not be removed or modified and that the fire system would need to be reconfigured and redesigned due to the metal beam.  Anytime you change a fire system from the original design you must accomplish a redesign as you must re-calculate what the quantity flow will be.  Taking this situation into consideration would it be appropriate under the changes or differing site conditions clauses?  I would see it as a differing site condition, although it could possibly be argued as a being under the changes clause.  I am unable right now to see how the additional work and time required for this would be considered under the defaults clause, yet this is how the inspector viewed it simply because of the extension in the period of performance.  

Emphasis added. Pursuant to FAR 52.236-2(a)(1), that's a Type I differing site condition:

Quote

Subsurface or latent physical conditions at the site which differ materially from those indicated in this contract[.]

But since, according to the "case in point", a redesign will be necessary, the appropriate clause to use would be the Changes clause, FAR 52.243-4.

The "case in point" cannot be resolved under the Differing Site Conditions clause, the Suspension of Work clause, or the Default clause, because none of those clauses authorize the CO to make the necessary design changes. Use of the Differing Site Conditions clause is appropriate when a differing site condition will impact the contractor, but not require changes to the design. Since the contractor must perform in accordance with a changed design, and if the change might cause an increase or decrease in the cost of or in the time required for performance, then the contractor might be entitled to an equitable adjustment, including profit---remedies that neither the Suspension of Work clause nor the Default clause provide.

See? Plain English.

My issue about researching cases is not whether cases might be useful. They can be very useful in the right hands. The issue is time and know-how. Unless a CO is a lawyer, or otherwise very experienced in finding and analyzing cases, it is better for him or her to start with a secondary source---a hornbook or other treatise, such Administration of Government Contracts or Government Contract Changes---than it is to start researching and citing cases in support of arguments. A good secondary source will provide appropriate case citations and explain the cases.

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Agree with Vern!  Purchase the two books, with your own money, if necessary.  In my case, it resulted in millions of dollars of savings, over over 30 years, to the US Taxpayers (as well as the Saudis in the 80’s).  It also resulted in fair treatment of contractors and resolution of numerous disputes, claims and initial disagreements. 

 

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