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Invoicing for unworked hours under a FFP TO

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We have a FFP TO awarded again a GSA Oasis Contract (16.5 not 8.4), the contract has a SOW to provide support services in different areas (PM, Acquisition, Logistics, e.t.c.) and payment is made monthly for 1/12th of the total price. The total value of the contract was determined by estimating the number of hours needed for different LCATS. Although the labor hours and labor rates were never incorporated into the contract, we have bilaterally made several changes to the contract, increasing and decreasing the estimated hours required to provide the support needed. One of the CORs (contract supports several programs and we have 2 CORs) just notified us that one of the contractor personnel was only at his duty location about half the time  in the last few months and he was completely absent last month. The contractor invoiced and was paid in full for both months.

The COR kept track of the exact hours worked, but I am not sure how much good this does with a FFP contract. I asked the COR to identify the section in the SOW that was not performed due to the absent employee, which he did , but I have been told by more experienced Specialist and KO's that there is nothing we can do but ding them in a CPARS because its a FFP TO. Do we have any recourse to recoup an of the money paid or at least negotiate some consideration. The TO has 52.232-1 and has 4 option years left. I welcome and appreciate all input.

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Because you did not mention that the contract is a level of effort contract, I will assume that it is a completion contract.  If that is the case, why would the contractor be entitled to the entire contract price if it did not do all the work required by the contract?  Think of this as a supply contract:  if the contract called for the delivery of 10 items but the contractor only delivered 8 that were accepted, would the contractor be entitled to the price for the 10?

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If this contract is for severable services and the contractor failed to perform those services for an entire month then subsequently submitted an invoice for that month, that could be a violation of the False Claims Act, 31 U.S. Code § 3729 (reference Holt and Klass, "Implied Certification Under the False Claim Act," Public Contract Law Journal (Fall 2011):

Quote

The False Claims Act (FCA) expressly prohibits government contractors from submitting “a false record or statement” material to a claim for payment. And under the judicially created doctrine of implied certification, a mere request for payment implicitly represents material compliance with the contract, as well as relevant statutes and regulations. As a result, a government contractor who requests payment without disclosing a known material breach can violate the FCA, triggering treble damages and fines of between $5,000 and $10,000 for each payment request.

Without reading your contract and knowing what supporting documentation may be available, I can’t give you a definitive answer; however, I can say that the Government has more options available to address non-performance than merely rating the contractor poorly in CPARS (even if the contract is FFP).

One caution: the number of hours worked is likely irrelevant as you probably did not contract for a certain number of hours (regardless of the “estimates” you mention in your post).  What is likely relevant are the contract’s requirements: if the Government contracted for X, Y, and Z services and the contractor failed to perform X, Y, and Z services, there is a problem; however, if the contractor performed X, Y, and Z services in half the “estimated” time, that sounds like a job well done to me.

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8 hours ago, MAY-D-FAR-B-WIT-U said:

Do we have any recourse to recoup an of the money paid or at least negotiate some consideration[?]

@MAY-D-FAR-B-WIT-U

It is not possible to answer that question based on the information that you provided.

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14 hours ago, MAY-D-FAR-B-WIT-U said:

I asked the COR to identify the section in the SOW that was not performed due to the absent employee, which he did…

I presume this contract is for noncommercial services. Does it include FAR Clause 52.246-4, Inspection of Services -- Fixed-Price? If yes, have you read it?

As a general rule, fixed-price payments (not financing) are tied to specific contract requirements. The clause you cited provide for payment for 'accepted' services (rendered and accepted) upon contractor's submission of a 'proper' invoice.

There are government remedies and possible actions but, as the others have stated, more information is required. Some possibilities could include issuing a claim (CO decision and demand for payment), witholding payment, (re)performance, revoking acceptance, etc.

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It seems pointless to continue to speculate until we find out more information concerning the services which were billed for and not provided. Did the contractor bill the government for ??? that was specifically  required but not provided? 

If so, it appears that you are asking if the government can recoup the money paid. 

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18 hours ago, MAY-D-FAR-B-WIT-U said:

Do we have any recourse to recoup an of the money paid or at least negotiate some consideration. The TO has 52.232-1 and has 4 option years left.

This is a classic example of a question to which the answer depends entirely on a close reading of the actual contract language as a whole. The question cannot be answered reliably on the basis of a secondhand description of what the contract says and the relating of a few facts, especially a muddled relating. 

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19 hours ago, MAY-D-FAR-B-WIT-U said:

One of the CORs (contract supports several programs and we have 2 CORs) just notified us that one of the contractor personnel was only at his duty location about half the time  in the last few months and he was completely absent last month. The contractor invoiced and was paid in full for both months.

The COR kept track of the exact hours worked, but [approved the contractor's invoices anyway, while knowing that the contractor was not fully performing the required services]

Not sure the fault lies fully with the contractor on this one.

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Thank you all for your responses....This is a contract for commercial services where the contractor supplements the government effort in several technical areas and in many of the positions, the contractor staff have a higher technical expertise. The SOW does not list specific task but general areas where support will be required, I’ll give an example which I have altered a bit.

a) The contractor shall provide support to include the following technical areas: Propulsion  Systems, Electrical Systems. 

b ) The contractor shall provide SME in Design and Construction of XXXXX. The contractor shall assist in development of system specifications, engagement with industry  

The sow does not detail the exact work to be performed just the technical and subject areas where the work will performed. The contract does call for monthly deliverables that list the work that was performed, interestingly, the contract also requires the contractor to include a breakdown of labor hours and labor categories but the contractor has never complied with the LCAT and hours part.

It is not so easy to answer the questions 1)was the performed? and 2 ) what exactly did the contractor bill for that was not performed? In the absence of the contractor the Government employees picked up the slack and performed the work, the best I got from the COR was that because the contractor employee was unavailable the technical drawings were not completed  

Two more contractor employees just left and due to the very technical nature of the work they are struggling to fill the positions We are now going to legal to see what we can do.

I am new to this agency and I have a new requirement that very much mirrors this one and the SOW Is even less definitive on the nature of the work.  I don’t think we selected the right contract type and I would like to read your comments and hopefully help guide me on the right path  sorry for the long post but wanted to provide as much detail as possible 

 

 

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This was the original post:

On 12/11/2017 at 12:10 PM, MAY-D-FAR-B-WIT-U said:

We have a FFP TO awarded again a GSA Oasis Contract (16.5 not 8.4), the contract has a SOW to provide support services in different areas (PM, Acquisition, Logistics, e.t.c.) and payment is made monthly for 1/12th of the total price. The total value of the contract was determined by estimating the number of hours needed for different LCATS. Although the labor hours and labor rates were never incorporated into the contract, we have bilaterally made several changes to the contract, increasing and decreasing the estimated hours required to provide the support needed. One of the CORs (contract supports several programs and we have 2 CORs) just notified us that one of the contractor personnel was only at his duty location about half the time  in the last few months and he was completely absent last month. The contractor invoiced and was paid in full for both months.

The COR kept track of the exact hours worked, but I am not sure how much good this does with a FFP contract. I asked the COR to identify the section in the SOW that was not performed due to the absent employee, which he did , but I have been told by more experienced Specialist and KO's that there is nothing we can do but ding them in a CPARS because its a FFP TO. Do we have any recourse to recoup an of the money paid or at least negotiate some consideration. The TO has 52.232-1 and has 4 option years left. I welcome and appreciate all input.

Emphasis added.

The answer to the question depends on whether the contract stipulates that the contractor is obligated to place a specific worker or specific kind of workers at the "duty station" in question during specific time periods. If it does, then I think you might be able to recover some part of the payments made. If the contract does not so stipulate, then I do not think that you can recover the payments in court unless you can show that the service provided during the months in question did not conform to the SOW in some other way due to the absence of the personnel in question. Of course, you can always just ask the contractor to return what you consider to have been an overpayment.

That's a half-baked answer, but the best that I can do based on the information that you have provided.

@MAY-D-FAR-B-WIT-U

You posted to the forum for beginners, so I assume that you are a beginner in contracting. Since you are a beginner, I hope that you have learned something from the responses that you have received here---not about the answer to your question, but about the nature of contracting. I will not recommend a contract type for your requirement, but I will say that it sounds like it should be some form of level-of-effort type.

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Interesting that the task order is for commercial services and uses clause 52.232-1 rather than 52.212-4(i). (Ref. FAR 12.301(a), (b), and (d)).

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It seems that this turns on the question, did you (the Government) receive what you contracted for?  From what I can see in your write-up, the answer is yes.

 

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Jamaal, in my experience, it is not uncommon for contracting officers to include clauses normally included in contracts for non-commercial items in contracts for commercial items as well as 52.212-4.  For example, a contract may include a separate Changes clause or Termination clauses in addition to 52.212-4.

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Retreadfed:

What authority are they using?

Is it because those contracts include commercial and noncommercial supplies or services; or another compliant exception to FAR Part 12 requirements?

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7 hours ago, Jamaal Valentine said:

Interesting that the task order is for commercial services and uses clause 52.232-1 rather than 52.212-4(i). (Ref. FAR 12.301(a), (b), and (d)).

Jamaal - Would it be that surprising to you if they erroneously included both clauses? It wouldn't be to me. Happens all the time.

Even for a scrutinizing eye, it can be difficult to determine which clauses are "consistent with customary commercial practice," and the clause matrix has historically contained errors and omissions.

All of which is to say, I don't think you should put too much emphasis on this point :)

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FrankJon: 

It is not shocking or surprising to me, but this is the beginner's thread so I think such a thing is worth highlighting. We don't want to mislead beginners into believing they can add clauses haphazardly.

22 minutes ago, FrankJon said:

Even for a scrutinizing eye, it can be difficult to determine which clauses are "consistent with customary commercial practice," …

I am not sure what you mean.

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3 minutes ago, Jamaal Valentine said:

We don't want to mislead beginners into believing they can add clauses haphazardly.

OK, now I see your intent.

3 minutes ago, Jamaal Valentine said:

I am not sure what you mean.

FAR 12.301(a)(2) states: "[include only those clauses] Determined to be consistent with customary commercial practice." As far as I know, there's no litmus test for this.

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I should have been more specific. I don't understand what '[e]ven for a scrutinizing eye, it can be difficult to determine…'. What are you looking for, generally? A written determination, market research, contractor memo, etc. Or that all the other requirements of Part 12 are followed? Or something else?

FAR 12.301 should be read a whole.

If a commercial contract includes both 52.212-4 and 52.232-1, which applies? One or the other? Both? 

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Jamaal - It's not important. I was only making a broader point about the futility of reading too much into the existence or non-existence of a single clause. Errors can happen both to COs who are careless, and those who are aware of and attempting to comply with 12.301(a)(2). 

54 minutes ago, Jamaal Valentine said:

If a commercial contract includes both 52.212-4 and 52.232-1, which applies? One or the other? Both? 

If they conflict, then I believe that 52.212-4 would control per FAR 12.102(c).

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Jamaal, in answer to your question to me, they are not relying on any authority.  They simply look at the clauses that are required for an FFP contract and include them as well as 52.212-4, even if the contract is only for commercial items.  In my view, this is done because the contracting officer does not know what (s)he is doing, particularly in regard to contracting for commercial items.

In regard to which clause controls an action, I was involved in a situation a little over a year ago where a contract for commercial items contained 52.212-4 and 52.249-2.  The contracting officer terminated the contract using the authority of 52.249-2.  A dispute over the termination settlement proposal was appealed to the responsible appeals board where it was settled through mediation conducted by a board judge.  At no time did the government attempt to argue that 52.212-4 was controlling and that it was improper to rely on 52.249-2.  Further, the judge did not raise this as an issue in the mediation.

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Thanks, Retreadfed. Sounds like in that scenario all parties accepted 52.249-2. I wonder (not asking) what would happen if the contractor disputed its inclusion and applicability.

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I really appreciate all the responses, in digging and getting more people (program office) involved, the SOW was specifically written to give them flexibility to assign  a variety of work to the contractor. The COR informed me that tasks are generated mostly on a daily/weekly basis and occasionally monthly, and are then assigned to contractor personnel. It seems we got what we paid for (support) but we will still proceed to discuss availability issues with the contractor. We also bounced around the idea of having a task list that will be incorporated into the task order on a monthly basis and seeing if the contractor will be okay with including this in the SOW.

 

You posted to the forum for beginners, so I assume that you are a beginner in contracting. Since you are a beginner, I hope that you have learned something from the responses that you have received here---not about the answer to your question, but about the nature of contracting. I will not recommend a contract type for your requirement, but I will say that it sounds like it should be some form of level-of-effort type.

 

Vern,

I downloaded the DAU contract type chart and reviewing all the contract types, I agree with your statement but LOE type contracts are frowned upon here. The other possibility I think might work is an IDIQ, but some of the tasks are so small and the administrative burden may not be worth it. I am hoping I can apply the lesson learned here to my new requirement.

 

@FrankJon and @Jamal,

The OASIS IDIQ has the non-commercial clauses but our TO has commercial clauses. The statement below is from section I1 in the Oasis IDIQ contract "

"In accordance with FAR 52.301, Solicitation Provisions and Contract Clauses (Matrix), the OASIS master contracts cannot predetermine all the contract provisions/clauses for future individual task orders. However, all Applicable and Required provisions/clauses set forth in FAR 52.301 automatically flow down to all OASIS task orders, based on their specific contract type (e.g. cost, fixed price etc), statement of work, competition requirements, commercial or not commercial, and dollar value as of the date the task order solicitation is issued.

However, the OCO must identify in the task order solicitation whether FAR Part 12 commercial clauses/provisions apply or not apply. Furthermore, the OCO must identify any Optional, and/or Agency-Specific provisions/clauses for each individual task order solicitation and subsequent award. For Optional and/or Agency-Specific provisions/clauses, the OCO must provide the provision/clause Number, Title, Date, and fill-in information (if any), as of the date the task order solicitation is issued "

 

Thank you all and if I get any interesting advice from legal today, I'll be back to update the post.

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30 minutes ago, MAY-D-FAR-B-WIT-U said:

It seems we got what we paid for (support) but we will still proceed to discuss availability issues with the contractor.

Look at your CLIN description(s) and at the associated SOW. Did you specify process, result, or manning (pardon the sexist term). Did you specify any combination of those? If you did not specify manning, then you probably got what you paid for.

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