Jump to content
The Wifcon Forums and Blogs
CountryTime

One Mod - Two Authorities

Recommended Posts

11 hours ago, ji20874 said:

Joel,

May I ask you to respond to my question?  You (and Don) and telling readers not to use agreement of the parties, but you aren't telling them what they should use instead.

In a contract for commercial items, the contract calls for 100 EA white items for delivery in 60 days.  Shortly after award, the parties agree to 33 white, 33 red, and 34 blue in 45 days.  That’s legal and honorable, right?  Everyone is happy.  What is the authority for block 13 of the SF-30?

I'm not telling readers not to use agreement of the parties, I just don't see that as an "authority" as that word is used in block 13 of the SF 30. It seems like a superfluous description of the modification. It's of no use. I would say the same of "FAR 1.602-1".

The only value I can see in providing a citation in block 13C is if there were no consideration. Normally, the contracting officer would have to ensure that there was consideration in a bilateral modification (i.e., the CO does not generally have the "authority" to bilaterally modify the contract without obtaining consideration). If, however, the modification was a negotiated adjustment pursuant to a contract clause that only made changes in one party's favor, then citing the clause communicates that the contracting officer is not required to obtain consideration. 

The modification in your scenario is legal, honorable, and brings joy. I would put "Not applicable--consideration required" in block 13C.    

Share this post


Link to post
Share on other sites
19 hours ago, ji20874 said:

Joel,

May I ask you to respond to my question?  You (and Don) and telling readers not to use agreement of the parties, but you aren't telling them what they should use instead.

In a contract for commercial items, the contract calls for 100 EA white items for delivery in 60 days.  Shortly after award, the parties agree to 33 white, 33 red, and 34 blue in 45 days.  That’s legal and honorable, right?  Everyone is happy.  What is the authority for block 13 of the SF-30?

It’s a apparently a simple change of colors and the contractor can deliver sooner. The parties have agreed bilaterally to the change per 52.212-4 (c). 

In my opinion, said paragraph authorizes changes, as long as they are bilateral. In other words, the contract specifically permits only mutually agreed changes to the purchase of the commercial item.

Instead of taking multiple sentences and paragraphs to say that, it was packed into one short sentence. 

Share this post


Link to post
Share on other sites
On 3/7/2019 at 7:33 PM, joel hoffman said:

ji, not sure how you deduced that I wasn’t advising what to cite as the authority for a mod. In addition to the above reference, read my several posts. 

Share this post


Link to post
Share on other sites
On 3/5/2019 at 3:23 PM, CountryTime said:

What are your thoughts on a modification to a commercial PO to enact a slight reduction in service for remaining options (52.212-4(c) as the authority) and, in the same mod, exercising the first option period citing 52.217-9 in the verbiage of the mod?  Essentially citing two authorities in the same modification.  

Only one authority should be cited on a modification document because it is the part that indicates what allows the modification action in the first place. In your example, commercial changes are a bilateral modification action, requiring both parties to sign (acknowledging agreement) that something of the terms and conditions identified in block 14 has changed. Exercising an option is a unilateral modification, so you wouldn't require the Contractor's acknowledgement with a signature and is contingent on proper advanced notification to the Contractor that the Government intends to exercise the option.

Also consider that when you execute a modification with two different authorities, how are you going to report that action to the Federal Procurement Data System - Next Generation (FPDS), where only one action can be selected? If your modification invokes two different authorities, let alone two different modification types, then how are you reporting accurately to FPDS about your modification? This single-selection FPDS feature implies that there is only one contract authority per one modification action.

And since it was mentioned in the thread, utilizing “mutual agreement of the parties” should only be used as a last resort in which the circumstances aren’t supported by a FAR authority (i.e. Contract Clause). I am attaching a useful guide on utilizing block 13 for contract modifications to share with everyone here. I understand that there are various practices around the workforce, but consider what are the best practices, and understand why it is.
 

Contract Modification Authority Guidance Chart (SF30, Block 13).pdf

Share this post


Link to post
Share on other sites
3 hours ago, coolarmydude said:

Only one authority should be cited on a modification document because it is the part that indicates what allows the modification action in the first place.

That's just, like, your opinion, man. You haven't provided any good reason why only one modification authority can or should be cited. Can you provide any valid or persuasive source that states that each modification of a federal contract should cite only one modification for its authority? 

Have you considered the ridiculousness of this position, given that many single contract modifications accomplish several different changes and are therefore based on more than one single reason (authority)?

3 hours ago, coolarmydude said:

Also consider that when you execute a modification with two different authorities, how are you going to report that action to the Federal Procurement Data System - Next Generation (FPDS), where only one action can be selected?

It seems like you allow the limitations of FPDS to significantly affect the way you conduct procurement. That is a mistake.

3 hours ago, coolarmydude said:

This single-selection FPDS feature implies that there is only one contract authority per one modification action.

The FPDS feature implies that FPDS was designed that way, and not much else. Divining any wisdom or knowledge about contracting from the arbitrary software or user interface design of FPDS is a mistake. FPDS is a reporting and data warehousing system; a system of record. 

Think it through. There are modifications that are clearly based on more than one authority. This isn't a complicated idea or a controversial statement. Your solution is to ignore the other authorities and simply pick one out of a hat? Or pick the authority that provides the most flexibility?

Examples:

(a) exercise an option and also change the SOW

(b) incremental funding and also changes to the security requirements

(c) incremental funding and period of performance extension

(d) incremental funding and period of performance extension and change to the SOW and change to the security requirements

Under your preference, which is not supported by anything convincing, the contracting officer should simply pick one of the authorities and ignore the others. That's not helpful or illuminating to others who review the file. 

Share this post


Link to post
Share on other sites

Coolarmydude piqued my awareness that the proposed mod includes both a unilateral action - incorporating the first option - and a bilateral action to change that option(?) and all remaining options (not sure if the first option is included in the change). 

If the first option is changed as awarded  along with future options, I think the government should first issue the bilateral mod to the options.

Then, unilaterally award  the now changed option. 

Maybe do it in some other order but I wouldnt mix bilateral (two party signatures) and unilateral actions (one party signature) in a single SF30.  

Share this post


Link to post
Share on other sites

FAR 52.217-9 provides the government with authority to extend the term of the contract through the *unilateral* exercise of an option.  It is well settled that the government must exercise an option “in exact accord with the terms of the contract.”  Freightliner Corp. v. Caldera, 225 F.3d 1361, 1366 (Fed.Cir.2000).  Modifying the terms of the contract at the same time that you are exercising that option, means you are not exercising an option in accord with the terms as they exist in the contract.  An attempt to unilaterally exercise an option according to terms different from those set forth in the contract is invalid.  See Alliant Techsystems, Inc., v. United States, 178 F.3d 1260, 1275 (Fed. Cir. 1999).

However, the Court of Federal Claims has held that while an attempted option exercise that differs from the terms of the contract prevents the option from being exercised unilaterally, the parties may agree to the modification bilaterally.  See 4737 Conner Co. v. United States, 65 F. App'x 274, 276–77 (Fed. Cir. 2003) (“[T]he government here attempted to exercise the option and thought it was properly doing so. However, the letter purporting to exercise the option referred to terms outside of those in the option.… This explicit reference to a termination provision that was no longer contained in the option … converted [the government’s] purported acceptance of the option into a counter-offer that [the contractor] was free to either accept or reject.”)

Further, before exercising an option pursuant to 52.217-9, "the contracting officer shall make a written determination for the contract file that exercise is in accordance with the terms of the option, the requirements of this section, and Part 6. To satisfy requirements of Part 6 regarding full and open competition, the option must have been evaluated as part of the initial competition and be exercisable at an amount specified in or reasonably determinable from the terms of the basic contract..."  You cannot do that if you are exercising an option that has terms different than the basic contract.

Therefore, when executing a modification that both changes the terms of the contract and extends the period of performance, you should not cite FAR 52.217-9, because you are not relying on its authority to unilaterally modify the contract.

Instead, your authority is the same as any other bilateral modification, as discussed below.

With regard to that authority, Don is correct.  FAR 1.602-1(a) states “Contracting officers have authority to … administer … contracts….”  Unless you are relying on some other specific and applicable modification authority, then FAR 1.602-1(a) and your warrant are your authority to modify a contract.  The only reason this is an issue is because there is a box on a form that someone has decided must be filled in.  When you award a contract, do you cite your authority to enter into a contract?  If asked would you cite “mutual agreement of the parties”?  Your authority to “enter into” a contract is FAR 1.602-1(a) and your warrant.  This is the same authority to “administer” contracts, which includes modifications. 

FAR clause 52.212-4(c) is not an authority.  It is a limitation on authority.  It requires that all modifications be (1) bilateral, and (2) in writing.  Requiring that a modification be bilateral and in writing does not grant authority where it did not previously exist, it limits the types of modifications that are enforceable.  It prohibits oral modifications or modifications imposed without the consent of one of the parties.

As explained by the Court of Federal Claims, to be enforceable, a bilateral modification must have the same elements as a contract. 

"The question thus devolves to whether plaintiff can enforce a contract modification to which defendant asserts the Air Force never assented. An express contract requires intent to be bound, and such intent must be expressed in a manner capable of understanding. Unconditional acceptance must be established. “It is essential ... that the acceptance of the offer be manifested by conduct that indicates assent to the proposed bargain.” In addition to mutuality of intent to contract and lack of ambiguity in offer and acceptance, consideration is also necessary to bind the Government. Manifestation of mutual assent will not be present “if the parties attach materially different meanings to their manifestations and ... neither party knows or has reason to know the meaning attached by the other ....”

ECC Int'l Corp. v. United States, 43 Fed. Cl. 359, 369 (1999) (citations omitted). In effect, a modification is a contract to change an existing contract. 

Restated, the elements of a contract and/or modification are:

(1) mutuality of intent to contract;

(2) consideration;

(3) an unambiguous offer and acceptance; and

(4) actual authority on the part of the government's representative to bind the government.

Marchena v. United States, 128 Fed. Cl. 326, 331 (2016), aff'd, 702 F. App'x 988 (Fed. Cir. 2017).

So, “agreement of the parties” is a prerequisite of a bilateral modification and necessary to satisfy elements (1) and (2).  Further, mandating the agreement be in writing, as 52.212-4(c) does, helps ensure that there is an unambiguous offer and acceptance.  But neither of those oft-cited "authorities" confers “actual authority” on anyone signing a contract.  If a government employee, who is not a contracting officer, "mutually agrees” to enter into a “written,” “bilateral” agreement with a contractor, there is still no contract (or modification) because the employee does not have authority.  It’s the whole reason the FAR contains a process to ratify *unauthorized* commitments. 

So, why does the SF-30 require the contracting officer to cite an authority?  I do not know.  But, my guess is that it is intended to account for unilateral modifications authorized by specific clauses, for example, 52.243-1 -- Changes-Fixed-Price, and 52.217-9 -- Option to Extend the Term of the Contract.  These modifications are effected without a new “offer and acceptance” or additional “consideration.”  Those contractual elements of a modification are satisfied at the time of contract award and reflected in the contract clauses authorizing the unilateral modification. 

For example, under FAR 52.217-9, the parties have mutually and unambiguously agreed that the government has authority to unilaterally extend the term of the contract. Consideration exists as part of the price the government is paying under the contract.  Because such a unilateral option exercise would not be possible without the inclusion of FAR 52.217-9, it should be cited as the authority to make such a modification when it applies.

In the end, cite whatever you want.  Writing something in block 13 of the SF-30 does not grant you authority.  Leaving it blank does not or citing something wrong does not divest you of the authority you already have.  Yes, its better to have the correct authority written, but if someone in the government tracks some metric using block 13 and they want you to write something else, it will have little impact on the contract.

Share this post


Link to post
Share on other sites

My point above was to point out that I generally wouldn’t mix a unilateral action with a bilateral action in the same mod. The unilateral action doesn’t require contractor agreement or (generally) its signature. 

As for the “slight reduction in services”, the OP described it as a change. It might be a severalble service that could be separately terminated for convenience but who knows. 

 Note that the instructions for SF-30 state that the KO “generally” signs supplemental agreement mods after the Contractor signs the mod form. Another reason not to mix mod types ... 

Share this post


Link to post
Share on other sites
3 minutes ago, joel hoffman said:

My point above was to point out that I generally wouldn’t mix a unilateral action with a bilateral action in the same mod. The unilateral action doesn’t require contractor agreement or (generally) its signature. 

As for the “slight reduction in services”, the OP described it as a change. It might be a severalble service that could be separately terminated for convenience but who knows. 

I agree.

Share this post


Link to post
Share on other sites
1 hour ago, Lionel Hutz said:

In the end, cite whatever you want.

Your entire post is well stated, I appreciate it. 

 

1 hour ago, Lionel Hutz said:

With regard to that authority, Don is correct.  FAR 1.602-1(a) states “Contracting officers have authority to … administer … contracts….”

I do have to raise a thought.   The FAR does not place authority upon some one, nor does it have authority upon a contractor.   It is internal guidance to the Government.  This said it would seem to me that FAR 1.602-1(a) is not an authority in an of itself to change a contract either unilaterally or bilaterally.   The warrant is the authority.

Share this post


Link to post
Share on other sites

The warrant isn’t the “authority” that the Instructions for SF-30 is looking for...

If it were, there’d be a designated place for it on the form. That’s an internal government matter. Hang it on the wall or hallway. Make sure it is in the KO’s framed picture of themself, displayed  prominently.

I think the KO ought to hold up a copy of the FAR in the pic. 🤪

Share this post


Link to post
Share on other sites
6 minutes ago, joel hoffman said:

The warrant isn’t the “authority” that the Instructions for SF-30 is looking for...

To paraphrase Lt. James Gordon, the warrant is the authority the contracting officer deserves, but not the one the SF-30 is looking for right now. So we'll hunt the warrant. Because the warrant can take it. Because the warrant is not our hero. The warrant is a silent guardian. A watchful protector. A Dark Knight.  Wait, what?  I mean… Nevermind…

Share this post


Link to post
Share on other sites
21 minutes ago, C Culham said:

 

I do have to raise a thought.   The FAR does not place authority upon some one, nor does it have authority upon a contractor.   It is internal guidance to the Government.  This said it would seem to me that FAR 1.602-1(a) is not an authority in an of itself to change a contract either unilaterally or bilaterally.   The warrant is the authority.

I agree, and later in the paragraph I wrote, "Your authority to 'enter into" a contract is FAR 1.602-1(a) and your warrant."  But to the extent someone feels obliged to cite a FAR section, 1.602-1 probably would be the most relevant.  Although, I could see the argument that FAR 1.603-3 -- Appointment is relevant as well.

 

Share this post


Link to post
Share on other sites
4 hours ago, Lionel Hutz said:

I agree, and later in the paragraph I wrote, "Your authority to 'enter into" a contract is FAR 1.602-1(a) and your warrant."  But to the extent someone feels obliged to cite a FAR section, 1.602-1 probably would be the most relevant.  Although, I could see the argument that FAR 1.603-3 -- Appointment is relevant as well.

 

With it noted that a warrant is numbered or at least that is the authority it is looking for!  No picture needed just as I have already stated check "Other" write in "warrant" and the "warrant number"!

Share this post


Link to post
Share on other sites
11 minutes ago, C Culham said:

With it noted that a warrant is numbered or at least that is the authority it is looking for!  No picture needed just as I have already stated check "Other" write in "warrant" and the "warrant number"!

Your signature as KO serves as your authority to sign the mod. A warrant number is unnecessary. That’s not what they are looking for. Sheesh. 

Share this post


Link to post
Share on other sites

Additionally- many warranted contracting officers in some organization (e.g., ACO’s) have limited authority to modify contracts - only under specific contract clauses.  

Besides that- if you can’t explain or otherwise justify why you are modifying a contract, you have little business being the the one to sign the mods.  

 

Share this post


Link to post
Share on other sites
1 hour ago, joel hoffman said:

Your signature as KO serves as your authority to sign the mod. A warrant number is unnecessary. That’s not what they are looking for. Sheesh. 

Keep up Joel I was referring to the SF 1402 when I said form.

 

1 hour ago, joel hoffman said:

Additionally- many warranted contracting officers in some organization (e.g., ACO’s) have limited authority to modify contracts - only under specific contract clauses.  

Besides that- if you can’t explain or otherwise justify why you are modifying a contract, you have little business being the the one to sign the mods.  

 

Have you read the reverse of the SF 30?

Carry on!

Share this post


Link to post
Share on other sites

@Lionel Hutz,

I agree with almost everything that you wrote and you wrote very well. However, I don't agree that all bilateral modifications must have consideration. Some bilateral modifications are negotiated adjustments pursuant to contract terms--the consideration is already in the original deal. For example, the contractor experiences an excusable delay and the parties negotiate a schedule extension. The CO need not seek consideration for the schedule extension. For these types of bilateral modifications, I think there is value in citing the clause providing for the adjustment because the CO wouldn't otherwise have the authority to modify the contract without consideration. It tells the reviewing/approving official, who should be looking for the consideration, why consideration isn't necessary. For bilateral modifications that require consideration, I see no value in citing anything for the reasons you explained. I think the request for authority in block 13C has led to some of the dogmatic responses we've seen in this thread (e.g., "mutual agreement of the parties", "FAR 52.212-4(c)", etc.).   

Share this post


Link to post
Share on other sites
22 hours ago, PepeTheFrog said:

It seems like you allow the limitations of FPDS to significantly affect the way you conduct procurement. That is a mistake.

You assume that it is an inherent limitation. That is a mistake. 

But I used that as a guide as a hint on how to treat a modification. If I can cite 2 authorities, why not 10? Where does it end? The point I make is to consider what is best practice using all available information.

Share this post


Link to post
Share on other sites

Q: Why would we need to cite an authority?

A1: So that the Contractor, Ombudsman, GAO, Board, or Court can identify the scope and applicability of any  entitlements, and remedies (e.g., terms and conditions related to or arising from the modification authority).

A2: FAR includes requirements, other than the form itself, that the contracting officer 'shall cite' [insert clause] as the authority (e.g., FAR 17.207(g))

I wonder what a reviewer would think if 'contracting officer [discretion, authority, or decision]' was cited.

Share this post


Link to post
Share on other sites
13 hours ago, Don Mansfield said:

@Lionel Hutz,

I agree with almost everything that you wrote and you wrote very well. However, I don't agree that all bilateral modifications must have consideration. Some bilateral modifications are negotiated adjustments pursuant to contract terms--the consideration is already in the original deal. For example, the contractor experiences an excusable delay and the parties negotiate a schedule extension. The CO need not seek consideration for the schedule extension. For these types of bilateral modifications, I think there is value in citing the clause providing for the adjustment because the CO wouldn't otherwise have the authority to modify the contract without consideration. It tells the reviewing/approving official, who should be looking for the consideration, why consideration isn't necessary. For bilateral modifications that require consideration, I see no value in citing anything for the reasons you explained. I think the request for authority in block 13C has led to some of the dogmatic responses we've seen in this thread (e.g., "mutual agreement of the parties", "FAR 52.212-4(c)", etc.).   

Don,

Good points. However, if additional consideration is not needed because it exists in the underlying contract, then the clause almost certainly authorizes, at least in part, a unilateral modification. 

Take for example the Excusable Delays clause, FAR 52.249-14.  It provides, “the Contractor shall not be in default because of any failure to perform this contract under its terms if the failure arises from causes beyond the control and without the fault or negligence of the Contractor.”  In addition, it states, “If the Contracting Officer determines that any failure to perform results from one or more of the causes above, the delivery schedule shall be revised…”

This clause authorizes a unilateral modification to the contract.  If the contracting officer and the contractor cannot agree to a new delivery, the contracting officer would be within her authority to unilaterally determine a new date and modify the contract.

Now, as a practical matter, does it make sense to negotiate the delivery schedule with the contractor?  Absolutely.  Further, by agreeing to a new date, both sides have given up their right to argue that a different date should have been selected.  Not only does this limit litigation risk, but relinquishing legal rights serves as adequate consideration to bind the parties.  Consideration in a bilateral modification does not need to be in the form of money.

Does this mean the contracting officer is no longer issuing a modification under 52.249-14?  Not necessarily.  FAR 52.249-14 directs that the delivery schedule be revised and does not restrict the revision to either a unilateral or bilateral modification.  However, if 52.249-14 simply excused “excusable delays” but did not direct that “the delivery schedule shall be revised,” the contracting officer would still have the authority to modify the contract.

That is exactly the situation with 52.212-4(f), which addresses Excusable Delays in commercial contracts.  It simply notes that “The Contractor shall be liable for default unless nonperformance is caused by an occurrence beyond the reasonable control of the Contractor and without its fault or negligence…”  It limits the contracting officer from determining the contractor is in default when the default is due to an excusable delay.  However, it does not authorize the contracting officer to modify the contract, unilaterally or otherwise.  And that makes sense in this context because 52.212-4(c) has already told us that the contract can only be modified “by written agreement of the parties.”  In that case, a bilateral modification must be executed with consideration coming in the form of a reestablished delivery date enforceable by both parties.  In a FAR Part 12 contract, following an excusable delay, 52.212-4(f) may be the *reason* you want to modify the contract (i.e., the contract delivery date is no longer enforceable), but it is not your *authority* to modify the contract.

Sometimes the government’s reason and authority to modify the contract come from the same clause, but not always.  This is part of the problem with block 13 on the SF 30.  People want it to be a shorthand to tell them why the contract is being modified or modified in a certain way.  But that is not what authority tells you.

Cheers,

Lionel

Share this post


Link to post
Share on other sites
17 hours ago, Jamaal Valentine said:

A1: So that the Contractor, Ombudsman, GAO, Board, or Court can identify the scope and applicability of any  entitlements, and remedies (e.g., terms and conditions related to or arising from the modification authority).

Just for the heck of it I did a very simple search of CBCA and GAO and found no specific reference to "Block 13" in case or protest decision documents.

I did find this which reinforces that some believe it is important to place an authority in the SF 30.  (Search on this wording as could not copy/paste link)

"Contract Modification Authority Decision Help Guide"

But after my own research I have to agree with one two word quote in this thread.  "Dumb form"

 

Share this post


Link to post
Share on other sites

Had I pondered it a bit more, my answer to the original question would have simply been - don’t mix a bilaterally agreed change to all the options (supplemental agreement), requiring Contractor’s signature with a unilateral mod action to exercise award of an option.(no Contractor signature involved). 

 

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


×
×
  • Create New...