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Jack Russell

Proof of Receiving Goods or Services

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Thank you for approving my membership. While I always try to find answers to my questions from the FAR or other regulatory guidance the one addressed below is a bit of a challenge. 

I work for a contractor with a large government contract in Afghanistan.

Our contract requires client approval for any purchase over the MPT which is bureaucratic enough.

I am now faced with ‘technical direction” from the COR where after receiving goods or services regardless of price, that I am to submit (1) a DS 127 Form (Department of State Receiving and Inspection Report) signed by me, (2) the invoice, (3) photos of the goods received or attendance sheets for events or other supporting documents, boarding passes, flight tickets, etc. (4) procurement request, (5) all quotations received, (6) evaluation documents if over $500, (7) RFQ, (8) results of restricted party checks, (9) Vendor Business License, (10) Vendor Bank Account Information, (11) any required approvals, (13) modifications, and (14) various other documents.

The COR has his contract assistants scrub these documents looking for any inconsistencies and if good, signs off on the DS 127 which is returned to me and then processed by me for the billing cycle.

I have sent in these packages for purchases of less than $20 and when questioned on why this was being required when there was no contractual basis, the response was that all contracts in Afghanistan are audited by the SIGAR and OIG and the COR needed to show that the government actually received/took possession of the goods/services regardless of cost. When I mentioned that the administrative cost of verifying that the goods/services were received may more than offset potential savings from detecting instances of goods/services not being received, I was basically told that this was the requirement. I now have a local employee who does nothing but prepare and track these packages. 

The contract is a hybrid FFP and T&M.

I have never come across this requirement before for micro-purchases and again the COR’s contention is that he has to show that the government actually took possession of the goods/services even though many are consumables: meals, refreshments, lodging, etc., received by a contractor (my project) through the course of implementing the contract.

This has been brought to the attention of the CO without any action taken. Does anyone have any comments on a way around this?

 

 

 

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Does the contract contain the clause at FAR 52.243-7, Notification of Changes?

Does the contract contain the clause at FAR 52.233-1, Disputes?

If the answer to either is YES, you will want to read and follow those clauses carefully.  

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Does this documentation concern the time and materials portion of the contract ?

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2 minutes ago, joel hoffman said:

Does this documentation concern the time and materials portion of the contract ?

Tagging on to Joel's comment before retreating to changes or disputes clauses any response to your dilemma would be dictated by what the contract requires.  You have stated  there is no "contractual basis" for the effort.  To help in a more specific answer to "is there way around this" is for you to provide what brought you to your conclusion that there is no contractual basis.   By example if for the T&M element of the contract what is  required for payments such as is FAR Clause 52.232-7 or FAR Clause 52.212-4 with Alternate 1 in the contract?

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2 minutes ago, joel hoffman said:

Does this documentation concern the time and materials portion of the contract ?

Hi Joel, these purchases are mainly ODCs for training activities under the T&M portion of the contract. A few are under the FFP portion, but not many. 

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Thanks for your service to the war effort, Jack. I will echo Carl Culham’s comments and questions.  *🐕 

* (That’s Rockne, a retriever mix ❤️)

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Classic delay & disruption. Submit a Request for Equitable Adjustment for the cost impact of complying with the COR's direction.

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Jack,

Carl and Joel are trying to figure out if the contract requires you to do everything you are doing.  That's fair.

However, I am taking you at your word that--

  • (1) you have received "technical direction" from the COR;
  • (2) there is no contractual basis for his or her demands; and
  • (3) these demands are costing you money. 

If (1), (2), and/or (3) are not true, then you need to establish what the contract requirement are.  That is where Joel and Carl are leading you.  We have learned through experience that original posters rarely tell the whole truth in their original postings, and it makes sense to want to make sure of the facts before proceeding further.

But if (1), (2), and (3) are true (my starting point, based on your original posting, and notwithstanding real but sad experience in not getting all the pertinent information in original postings), I think you should carefully read the clause at FAR 52.243-7, Notification of Changes -- even if the clause is not in your contract, the principles in the clause are very applicable, and you may adapt them to help you solve your problem.  I recommend giving the contracting officer a written notice substantially the same as described in para. (b)(1) through (6) of the clause at FAR 52.243-7.  If that works (i.e., the agency drops its requirement or satisfies you that you are wrong), all is well.  If that doesn't work, you should carefully read the clause at FAR 52.233-1, Disputes, because you will be seeking one of the things offered by para. (c) of that clause and you might have to use that clause to get what you want.

Readers sometimes wonder why different commenters give differing responses — a big reason is because we approach the original posting from different directions.  

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3 hours ago, Jack Russell said:

these purchases are mainly ODCs for training activities under the T&M portion of the contract

Assuming 52.232-7 is in your contract, note that ODCs are considered to be material.  As such, payment for ODCs is governed by FAR 52.216-7.  FAR 52.216-7(a) states in part "The Contractor may submit to an authorized representative of the Contracting Officer, in such form and reasonable detail as the representative may require, an invoice or voucher supported by a statement of the claimed allowable cost for performing this contract."  Thus, there is a contractual basis for the COR to ask for supporting documents.  However, the issue is whether what is being asked for is reasonable as 52.216-7 mandates.  That is where the Changes clause and Disputes clause come in.

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You struck a deal. You think this changes the deal.

Submit a request for equitable adjustment or a claim. 

If you're denied, you might get an argument for why there was no change and this was included in the original deal. 

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Regardless of where we are starting, to establish a valid request for equitable adjustment, you must describe the existing contract requirement before you can establish that there has been a change and what that change is and how it increases your cost.

There has been a lot of high level criticism of the contracting practices in the Middle East and not being able to assure that we are getting what we contracted/paid for. That’s one reason I asked what the contract requires for payment backup. 

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Thank you all for the replies. You have given me a lot to research and a lot to think about. I am in awe of the knowledge on this board. 

The SOW of the contract states that in general, the Contractor shall first obtain approval for any PR by the COR/GTM prior to any procurement for items currently authorized under the contract $10,000 or above. Secondly, the resulting Purchase Order shall not deviate from the terms and conditions listed in the PR. If there are changes, the Contractor shall submit a revised PR. Under no circumstances shall a procurement be made before a PR is approved. Thirdly, no product or service can be invoiced until goods and services are received. Accordingly, the Contractor shall advise the COR/GTM that goods and services have been received and the COR/GTM shall inspect, validate, and verify. The COR/GTM shall sign-off on the Receiving Report so that the Contractor may submit for invoicing.

It is my contention that the COR inspecting, validating, and verifying only applies to purchases above $10K as outlined above. He is taking this to mean no product or service can be invoiced until he has inspected, validated, and verified when to me it is obvious that the words secondly and thirdly indicate that the conditions are linked to and applying to the first sentence which refers only to purchases above $10K, but others may see it different because it is somewhat ambiguous. 

I hope that I am making sense and thank you again for your input and patience. 

 

 

 

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Last thought.....

The SOW provides what and how the products or services shall be ordered.  By my read your concern is what must be provided for payment.  I might agree there is not necessarily good alignment between SOW and payment terms but all the same there is a difference in my book.

You have thoughts on how to address clarification with the government.  Good luck!

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3 hours ago, Jack Russell said:

I hope that I am making sense and thank you again for your input and patience.

Yes, you are making sense to me. And,  as you say, the requirement is ambiguous. You can push back with your argument. However, my view is that the Third requirement does not appear to be applicable only at $10,000 and above. You may be able to make headway with narrowing some of the 14 supporting documents being requested in support of the Third requirement. I would ask that the government put its 14 items in writing. You may then file for an equitable adjustment on the basis of those you interpret as out of scope to a reasonable reading of the requirement. For example, perhaps your company contemplated that the government would inspect by ocular analysis and validate/verify by reviewing your electronic records or supporting paper files...hence, your claim for equitable adjustment.    

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Jack,

Please see FAR 1.102-2 Performance Standards (b) Minimize administrative operating costs., at paragraph 1):

"In order to ensure that maximum efficiency is obtained, rules, regulations, and policies should be promulgated only when their benefits clearly exceed the costs of their development, implementation, administration, and enforcement. This applies to internal administrative processes, including reviews, and to rules and procedures applied to the contractor community."  (Emphasis added).

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Jack, I don’t think that the third requirement only applies to purchases exceeding $10k. 

no product or service can be invoiced until goods and services are received. Accordingly,...”

There is no distinction in this paragraph for invoicing purposes and the “Accordingly “ requirements  are not distinguished. They clearly follow [all] products or services conditions for invoicing.

That said, it would appear to me that the actual documentation for the receiving report isn’t described here.

And the government seems to have a responsibility to inspect, validate, verify and sign off on the receiving report, regardless of value. 

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For my colleagues and the OP.  

I have been concerned about the responses from the standpoint that contracting by many agencies is not new.  I also know that there are situations where the Government goes beyond its contractual authority in requesting a contractor to do something.  Noting this I have been bugged by the post and the quick responses as what the view is and what ought to occur without knowledge, specific knowledge of the contract in questions and what it might and might not say.  By example the OP has stated that a DS 127 is required.  Interestingly the form is not your standard receiving report but as provided by Dept of State manual is as follows -

"14 FAH-1 H-413.2-1  Receiving Reports

(CT:PPM-1;   08-11-2004)
(Uniform State/USAID)

Form DS-127, Receiving and Inspection Report, is used to confirm and record receipt of incoming property acquired by requisition, purchase order, or transfer document, and to document inventory overages.  The property listed on Form DS-127 should be added to the property records."

Likewise the OP has not confirmed what contract clauses regarding payment requirements are in the contract.  By example could they in fact be DOSAR clauses in the 652 series which might supplement the standard FAR clauses.   Or in other words what does the entire contract say not just the SOW. 

Now while I have cherry picked in part by quoting the FAH when I see requirements for photos etc. my uneasiness of not having all the facts grow from the standpoint that  the COR may be doing exactly what is needed.  I have this feeling as well from the standpoint that the OP has by my read paraphrased what the SOW says without quoting it specifically.

All said my suggestion to the OP is this.  Submit a request in writing to the CO requesting  specific reference to the contract that demonstrates and supports why the actions of the COR are considered to be in accord with the contract.  Request that the CO's response be in writing and be provided by certain date.   There is no harm of even indicating in the  letter that the requirements seem onerous and beyond the bounds of the contract and is the basis for the formal request.   Once response is received, or if not received, you (the OP)  would then be armed with adequate information to either comply and understand why or to, as noted by some, request a equitable adjustment to the contract for following direction not provided for in the contract.

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5 minutes ago, C Culham said:

For my colleagues and the OP.  

I have been concerned about the responses from the standpoint that contracting by many agencies is not new.  I also know that there are situations where the Government goes beyond its contractual authority in requesting a contractor to do something.  Noting this I have been bugged by the post and the quick responses as what the view is and what ought to occur without knowledge, specific knowledge of the contract in questions and what it might and might not say.  By example the OP has stated that a DS 127 is required.  Interestingly the form is not your standard receiving report but as provided by Dept of State manual is as follows -

"14 FAH-1 H-413.2-1  Receiving Reports

(CT:PPM-1;   08-11-2004)
(Uniform State/USAID)

Form DS-127, Receiving and Inspection Report, is used to confirm and record receipt of incoming property acquired by requisition, purchase order, or transfer document, and to document inventory overages.  The property listed on Form DS-127 should be added to the property records."

Likewise the OP has not confirmed what contract clauses regarding payment requirements are in the contract.  By example could they in fact be DOSAR clauses in the 652 series which might supplement the standard FAR clauses.   Or in other words what does the entire contract say not just the SOW. 

Now while I have cherry picked in part by quoting the FAH when I see requirements for photos etc. my uneasiness of not having all the facts grow from the standpoint that  the COR may be doing exactly what is needed.  

All said my suggestion to the OP is this.  Submit a request in writing to the CO requesting  specific reference to the contract that demonstrates and supports why the actions of the COR are considered to be in accord with the contract.  Request that the CO's response be in writing and be provided by certain date.   There is no harm of even indicating in the  letter that the requirements seem onerous and beyond the bounds of the contract and is the basis for the formal request.   Once response is received, or if not received, you (the OP)  would then be armed with adequate information to either comply and understand why or to, as noted by some, request a equitable adjustment to the contract for following direction not provided for in the contract.

Agreed. Unwise to suggest or urge someone to submit a claim or REA when we don’t know what the contract DOES require for verification documentation. 

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1 hour ago, C Culham said:

For my colleagues and the OP.  

I have been concerned about the responses from the standpoint that contracting by many agencies is not new.  I also know that there are situations where the Government goes beyond its contractual authority in requesting a contractor to do something.  Noting this I have been bugged by the post and the quick responses as what the view is and what ought to occur without knowledge, specific knowledge of the contract in questions and what it might and might not say. 

In which case, we should shut this forum down, because we are never, ever, going to have the full contract in front of us. We are never, ever, going to know all the circumstances.

If any poster on this forum wants a definitive answer, they need to not post here and, instead, hire an experienced and knowledgeable attorney and/or consultant. The fact that they ARE posting here means they are accepting a less than perfect answer. In my view, sometimes one must take the OP at their word and provide an answer to their question, knowing all the time that it is an imperfect answer.

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It also means they are open to hearing different thoughts from different perspectives.  This helps them to make their own decisions.  

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I do appreciate the responses and realize that there is probably no definitive answer, but you have definitely stimulated my thought process and encouraged me to explore different ideas on how to approach this.....since there is more than one way to verb a noun (PETA approved phrase).

For the record "The invoice shall contain all information required in other sections of this task order, including, FAR 52.216-7 (Allowable Cost and Payment) (for Materials portion of T&M only) and FAR 52.232-7 (Payments under Time-and-Materials and Labor-Hour Contracts)."

Now, I will probably really make it interesting since interestingly enough, one of the contract deliverables was submission of an Invoicing Plan at the beginning of the contract which incidentally mentions none of this required documentation:

The Contractor shall continue to provide an invoicing plan to ensure that billings are accurate and timely. The plan shall be submitted at TO start to demonstrate the ability to:
a.   Establish process for submitting, approving, and processing invoices (other criteria are added, but none specific to this discussion).
 

 

 

 

 

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1 hour ago, Jack Russell said:

The invoice shall contain all information required in other sections of this task order, including, FAR 52.216-7 (Allowable Cost and Payment) (for Materials portion of T&M only

This gets back to my original post.  Note that under 52.216-7, the invoice is to include the reasonable detail the designated representative requires.  Thus, the question is whether this level of detail is reasonable?

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1 hour ago, Retreadfed said:

This gets back to my original post.  Note that under 52.216-7, the invoice is to include the reasonable detail the designated representative requires.  Thus, the question is whether this level of detail is reasonable?

If that is the gist of the contract requirement per recent replies by Jack, I agree with the question. 

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4 hours ago, here_2_help said:

In which case, we should shut this forum down, because we are never, ever, going to have the full contract in front of us. We are never, ever, going to know all the circumstances.

If any poster on this forum wants a definitive answer, they need to not post here and, instead, hire an experienced and knowledgeable attorney and/or consultant. The fact that they ARE posting here means they are accepting a less than perfect answer. In my view, sometimes one must take the OP at their word and provide an answer to their question, knowing all the time that it is an imperfect answer.

I donot agree.  Rather I take exception to the fact that when an OP does post info ( Dept of State, DS 127, etc) WE and I repeat WE, do not do research on the facts.  By example why not look at the DOSAR before posting references to FAR clauses and increase perfection as best as possible.  Especially in a forum for beginners.

I do apologize for causing this distraction and will not in the future.

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