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Gwestbury

FAR 46.705 Warranties

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Is there some sort of background history on the policy behind the limitation of warranties at FAR 46.705(a) in cost reimbursement contracts?  I can't identify any board cases or decisions that include discussion of this provision, but then again I'm not the greatest search engine user. 

Thanks in advance.

 

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I don't have background to point you to. But at a basic level, the Government assumes the cost risk in a cost-reimbursable contract. So if an issue arises that would have given rise to a warranty claim under a FFP contract, the Government would be paying for the work under a CPFF contract.

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Thanks kevlar51.  Sorry I didn't post any context but work got in the way.  I have a customer that continually attempts to limit their risk under cost reimbursement contract vehicles despite the basics that you point out.  A while back they had included the following language in a Draft RFP (why I had posted this the Award section):

The Contractor is responsible for total performance under this Contract, including selecting the specific approaches and methods to perform all work. For all Contract work within the control of the Contractor, the consequences of any adverse Contractor work performance; consequences of any regulatory actions in response to adverse Contractor work performance; and/or inability to accomplish the Contractor’s proposed technical approach shall not be a basis for an upward adjustment to the cost and/or award fee and/or the firm fixed price.

This language was deleted after the pre proposal meetings but I believe it reflects their ongoing sentiment .  I've just wondered if they are butting up against the limitation of warranties in CR vehicles.

 

 

 

 

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19 minutes ago, Gwestbury said:

The Contractor is responsible for total performance under this Contract, including selecting the specific approaches and methods to perform all work. For all Contract work within the control of the Contractor, the consequences of any adverse Contractor work performance; consequences of any regulatory actions in response to adverse Contractor work performance; and/or inability to accomplish the Contractor’s proposed technical approach shall not be a basis for an upward adjustment to the cost and/or award fee and/or the firm fixed price. (emphasis added).

 

 

 

 

 

Gwestbury, is it possible that your customer is unrealistically seeking a firm fixed price contract instead of a cost reimbursable contract?

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As should be evident to a contracting office, the deleted language that you referred to exceeds the FAR concept for and contractor responsibilities  under a cost reimbursement contract. The Contracting office should advise the customer of the limitations and appropriate  application for use of cost reimbursement type contract versus firm fixed price contract. Then, either the type of contract or the customers expectations can be adjusted accordingly   

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I  don’t know why the webmaster relocated this thread from contract award category.  Probably due to the use of the term “warranty”  in the title and in the original post, which was misleading to me. The  original poster’s  later explanation  reveals that we are talking about much more than a typical warranty clause. 

This involves a proposed contract and the  proposed requirements for the contract. It also concerns whether cost reimbursement or firm fixed price is more appropriate contract type to fit the customer’s expectations Or whether the customers expectations are unrealistic for the scope of work and risks involved.

The OP didn’t post the thread under “For Beginners Only” category, so I don’t think it is necessary to go into detail in this Forum about the differences between CR and FFP contracts, or when to use one or the other.  There are plenty of references on the Internet to explain why the CR contract type doesn’t require the contractor to warrant that it will complete ALL work included in the SOW within the contract price. 

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If FAR 46.705 is mentioned, where do you put it?  Theoretically, everything could be under one forum--contract award process.   That's why I get the big bucks--less than $.50 (cents that is) an hour to maintain this site.

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Yes Bob, I should have expanded in more detail on the original post.  My bad.

38 minutes ago, joel hoffman said:

As should be evident to a contracting office, the deleted language that you referred to exceeds the FAR concept for and contractor responsibilities  under a cost reimbursement contract. The Contracting office should advise the customer of the limitations and appropriate  application for use of cost reimbursement type contract versus firm fixed price contract. Then, either the type of contract or the customers expectations can be adjusted accordingly   

Yes this is what I'm trying to do but was looking for a little support beyond just the regulation.  I can't find any discussion (other than ours) and was hoping I could find a court case, board decision or something that could amplify my advice beyond "you can't do that."

Thanks.

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I agree, Bob.  I can see why you moved it, based upon the limited information provided in the original post, with little context to the actual scenario.

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Given the (deleted) language of the draft RFP, quoted above, I was kind of interested in the timing of things. What happens if there is an adverse regulatory action that takes place after inspection and acceptance of the work? What happens if there is an adverse regulatory action years after the Period of Performance has expired? Obviously the contract is over and done with, so who cares? Not the contractor. The contractor is not going to be seeking an equitable adjustment based on what a regulator says/does years later. On the other hand, the government might file a claim against the contractor, I suppose, if it's within the 6-year CDA Statute of Limitations. If not, I'm not seeing much government recourse either, absent allegations of fraud.

Not sure if MBrown is with EPA or another civilian agency, but environmental remediation contracts tend to be cost-type for a reason: it's hard to define "remediated" ahead of time, until all the regulators have spoken.

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