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WC79

Key Personnel - Firm Fixed Price

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So I have a firm fixed price severable contract for IT help desk support. With the contract, two positions are named as Key Personnel per the clause and are also considered essential to the contract. During contract performance, one of the key personnel positions was vacant for 2 months. During this time period, performance on the contract suffered and deliverables were not met. The government does not want to terminate the contract but wonders if we can suspend payment for the Key Personnel position during the 2 months it was vacant? Is this possible given the fact that it is a fixed price contract?

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Consider application of the inspection clause in the contract and the remedies it provides for failure of work to meet contract requirements.

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I agree with the last posting.  The contractor failed (based on the original posting).  The Government has remedies.  In addition to reducing the contract price for the contractor's failure and the resulting lower quality of service it provided, please remember to record the contractor's failures in CPARS.

The next time the key personnel position is vacant contrary to contract requirements, promptly send the contractor a cure notice.  The next time deliverables are not met contrary to contract requirements, promptly send the contractor a cure notice.  A cure notice does not inexorably lead to a termination, so don't be afraid to send it.

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15 hours ago, WC79 said:

The government does not want to terminate the contract but wonders if we can suspend payment for the Key Personnel position during the 2 months it was vacant? Is this possible given the fact that it is a fixed price contract?

You did not say why the position was vacant for so long.  Getting people for a help desk contract shouldn't be that hard.  By chance, was the delay in filling the position due in whole or in part to government action?  Also, does the contract say anything about how long a position can be vacant without running afoul of contract requirements?  Finally, is this an FP-LOE contract?

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16 hours ago, WC79 said:

one of the key personnel positions was vacant for 2 months.

What does the Key Personnel clause in the contract require or permit be done?

Edited by Neil Roberts
typo omission

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On 9/18/2019 at 11:58 PM, WC79 said:

wonders if we can suspend payment for the Key Personnel position during the 2 months it was vacant? Is this possible given the fact that it is a fixed price contract?

Nobody really addressed this part of your question.  What inspection clause do you have in the contract? 52.246-24, Inspection of Services - Fixed Price?  Anything else?

Paragraph e of that states:

e) If any of the services do not conform with contract requirements, the Government may require the Contractor to perform the services again in conformity with contract requirements, at no increase in contract amount. When the defects in services cannot be corrected by reperformance, the Government may (1) require the Contractor to take necessary action to ensure that future performance conforms to contract requirements and (2) reduce the contract price to reflect the reduced value of the services performed.

If you decide to take action,  it may be different that just suspending payment of the key positions.  You need legal input.  If you want to reduce the contract amount, you need to calculate value of the reduced performance.  If you just want to withhold payment until resolution, that’s something different.

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