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FARmer

DoD Cost Plus Award Fee - what happens after 45 days?

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I will keep this short and sweet - DFARS 216.405-2(2), Award-fee evaluation and Payments, states "The fee-determining official's rating for award-fee evaluations will be provided to the contractor within 45 calendar days of the end of the period being evaluated." What happens/What rights does a contractors have should the award fee determination be delivered late? the DFARS and PGI are silent on this. 

 

 

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FARmer, is DFARS 216.405-2(2) incorporated in your contract?  If not, what does the contract say about when the award fee determination will be made?

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Most reasonable course of action is to ask whether there is a problem, whether your company contributed in any way to the delay and the estimated determination date. If you don't wish to do that or the response is not reasonable, you may argue that it is a constructive change and formally file a claim for an equitable adjustment.

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Thanks for all the questions. I don't want to try to go too deep into what's going on because I am sure the opposing side is watching as well.....  To answer your questions, let me go in this order: 

1) The Award Fee Determination Plan (AFDP) does not incorporate the language specifically from DFARS 216.405-2(2) and states a period longer than 45 days. Lets say 60 days.  The Contract does include the appropriate DFARS clauses for Award Fee contracts (DFARS 252.216-7004 & 7005). 

2)  Based on the situation and a misunderstanding by the award fee board chair and AFDO (of which is not the CO), the report has been late several times and in some cases, months after it was due. 

3) I believe there could be a case made that caused the date to slip with regards to a briefing that was given by the contractor to support its efforts on the contract (briefing that allows the contractor to rate themselves for consideration by the award fee board). These briefings usually take place 15 - 20 days after the period has closed. However, the AFDP clearly states when each period starts/ends and does not state that the clock starts ticking after the briefing has been given. 

4) the AFDP states that after several missed reports the contract will be converted to a CPFF........😭

I know the contracting officer has the unilateral right to make changes to the award-fee plan prior to the beginning of any rating period etc (DFARS 252.216-7005) but what rights does the CO have in breaking what is stated in the AFDP? My assumption is none, but this is a bad bad bad situation that is not going to go down very well. Dropping the CPAF contract structure and going to a CPFF would be a huge risk in its own as top notch performance is a must.    

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1 hour ago, FARmer said:

I know the contracting officer has the unilateral right to make changes to the award-fee plan prior to the beginning of any rating period etc (DFARS 252.216-7005) but what rights does the CO have in breaking what is stated in the AFDP?

If the award fee plan is incorporated into the contract, and depending on what it says and how it says it, government failure to perform in accordance with its terms might be a breach of contract. That much should be obvious. If it were a breach, you could submit a claim for breach damages. What such damages might be, and your chances of recovery, are questions you should put to an attorney.

You could write a diplomatic letter to the Fee Determining Official (FDO), copy to the CO, pointing out that the concept of award fee is based on the notion that timely feedback to the contractor in the form of a fee determination is supposed to motivate the contractor to improve those facets of its performance for which it did not receive the maximum award fee, and that the government's untimely fee determinations have undermined the effectiveness of the award fee incentive in your case. You could tell the FDO that you want to please your customer and urge the FDO to make more timely decisions. Such a letter might work if the FDO is a military officer. It is less likely to work if the FDO is a DOD civilian employee. Different mindsets.

I have seen many award fee incentives undermined by poor, unfair, or untimely fee determinations. I think the award fee incentive is the only one that is worth using, but I believe that most agencies simply are not competent to use it. I think you are probably in the hands of an incompetent agency.

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Thanks Vern. Competency in using and actually understanding the AFDP is the issue here, not the Agencies use of Award Fee Incentives. This all boils down to a few people not paying attention to the plan.

I guess on the flip side of your post (being in the Government's shoes), if the risk of converting the contract to a CPFF is too great in terms of diminished performance then the Government could 1) Breach the contract and pay a claim if one is submitted in hopes of keeping the CPAF contract structure.  2) Terminate the contract and re-compete if a CPAF contract is that important.  I don't think there is any other avenues for the Government to go in this case; correct?  

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Well, first off, the government could fix whatever problem is keeping them from complying with the award fee plan and continue under the CPAF contract.

Conversion to CPFF would ordinarily require the contractor's assent and would raise the issue of what fixed-fee the contractor would accept.

While a claim is possible in theory, it's not clear what the contractor could ask for.

Terminate and recompete is possible, but would be drastic.

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