IDIQ and Minimums Payment

[Govie]

Have a FFP IDIQ contract with minimums per POP with only one contractor on the IDIQ. Contractor performed well and met every requirement during the full duration of each POP. Contractor waits until end of contract and bills minimums. Higher ups directed me to instruct contractor to file a REA and are holding onto the obligation monies. To add to this, a large portion of the contracted work under this IDIQ was performed by another contractor since it was a secure facility and its “management” thought the contractor would not be the wiser, but I believe the contractor is aware and will take action.

 

My questions are:

1.       Given satisfactory performance, are the minimums guaranteed to the contractor holding the IDIQ?

2.       Can we legally force the contractor to do a REA and withhold payment until such time that the REA is submitted?

3.       Does the same contractor have a claim against the Government for outsourcing the remaining work?

4.       Does the “other” contractor illegally performing the work violate the False Claims Act?

5.       How do I legally defend the position the higher ups want me to take?

[ji20874]

Govie,

I read your posting twice, and I cannot understand it.  Can you try again?

[joel hoffman]

I’m afraid that you are going to have to clarify the scenario. 

Apparently you have a SATOC arrangement with multiple periods of performance. Each pop has a minimum obligation (unnecessary in my opinion). 

Were the additional periods of performance options that the government exercised ?

55 minutes ago, Govie said:

To add to this, a large portion of the contracted work under this IDIQ was performed by another contractor since it was a secure facility and its “management” thought the contractor would not be the wiser, but I believe the contractor is aware and will take action.

Please clarify the above scenario. I Thought you said that there was only one contractor on the ID IQ.

This ID/IQ was not a requirements contract, correct ?

Are you saying that another contractor was contracted for and performed the same type of work that is included in the SATOC? 

55 minutes ago, Govie said:

Contractor performed well and met every requirement during the full duration of each POP.

Contractor was issued task order(s) during each period?  For less than the minimum(s)? 
 

55 minutes ago, Govie said:

4.       Does the “other” contractor illegally performing the work violate the False Claims Act?

Please Explain the scenario. Didn’t understand - how is it illegal?  How would another contractor have made a false claim?

[Retreadfed]

1 hour ago, Govie said:

Higher ups directed me to instruct contractor to file a REA and are holding onto the obligation monies.

File an REA for what and on what basis?  What do you mean by "obligation monies"?

[Govie]

The contractor billed for the amount of work performed, which was well below the minimum amount on the contract. Now the contractor is billing for the difference: minimum amount minus actual amount performed. They are having me direct the contractor to submit a REA on the balance owed on the contract. Mgmt did not state the reasoning for wanting an REA instead of just paying the bill. 

Obligation money-the money funding the contract minimums upon contract award. 

This was just dropped in my lap, so I will clarify.

3 hours ago, Retreadfed said:

File an REA for what and on what basis?  What do you mean by "obligation monies"?

 

4 hours ago, ji20874 said:

Govie,

I read your posting twice, and I cannot understand it.  Can you try again?

 

[Govie]

3 hours ago, joel hoffman said:

I’m afraid that you are going to have to clarify the scenario. 

Apparently you have a SATOC arrangement with multiple periods of performance. Each pop has a minimum obligation (unnecessary in my opinion). 

Were the additional periods of performance options that the government exercised ? Yes.

Please clarify the above scenario. I Thought you said that there was only one contractor on the ID IQ.

This ID/IQ was not a requirements contract, correct ? There was only one contractor on the contract. The requirements clause was not in the contract, but it looks like a ducks, walks like a duck, and although the clause isn't in the contract, it maybe by default. 

Are you saying that another contractor was contracted for and performed the same type of work that is included in the SATOC? The other contractor performed the work under another contract.

Contractor was issued task order(s) during each period?  For less than the minimum(s)? Contractor was issued task order during each period for the minimum. Minimums were not met due to the other contractor performing the work under a staff aug contract.
 

Please Explain the scenario. Didn’t understand - how is it illegal?  How would another contractor have made a false claim? The other contractor was not part of the IDIQ contract and performed the work stated in the SOW under another contract.

 

[joel hoffman]

I think that you just said that each year there was a task order issued for the minimum but another contractor performed the work so this contractor was somehow prevented from performing the work...

so now the contractor wants to be paid for the work it was prevented from performing ...  ??

[Govie]

4 hours ago, ji20874 said:

Govie,

I read your posting twice, and I cannot understand it.  Can you try again?

 

This was just dropped in my lap, so I will clarify. Contractor A was awarded an IDIQ contract for minimum quantities. They billed for actual quantities. Since they hadn't received the minimum quantities, at the end of the contract they billed the difference. This work covered 5 facilities as stated in the SOW. One facility thought their contractor, Contractor B would do it faster, cheaper so they had the contractor that was already working in the facility assume a large portion of Contractor A's work. The contract did not have a requirements clause stated in it, but appears to be a requirements contract. Now, Contractor A has submitted invoices for balance of work and Mgmt directed last CO to reject payment and request Contractor A submit a REA. I am looking for the correct path forward.

[Govie]

Right now, the contractor is just trying to get paid for the minimums. Can we justify holding payment until an REA is submitted?  

I am expecting the contractor to also want to be paid for the work that was performed by the other contract company. 

[ji20874]

37 minutes ago, Govie said:

I am looking for the correct path forward.

The first step on the correct path forward is to accurately relate the facts.  Here are some questions to help...

1.  The Government awarded an indefinite-delivery indefinite-quantity (IDIQ) contract to Contractor A which provided for work at five government facilities and included the clause at FAR 52.216-22, Indefinite Quantity.
.          YES     NO     Remarks: _____

2.  The Government also issued a task order to Contractor A.  
.          YES     NO     Remarks: _____

3.  The task order purchased the minimum quantity for work at one of the five government facilities.
.          YES     NO     Remarks: _____

4.  Contractor A successfully performed the work for the task order.
.          YES     NO     Remarks: _____

5.  Contractor A invoiced for the work performed on the task order.
.          YES     NO     Remarks: _____

6.  The Government paid Contractor A for the work performed on the task order.
.          YES     NO     Remarks: _____

7.  No other task orders were issued.
.          YES     NO     Remarks: _____

8.  Contractor A also invoiced for the work for which it was never issued a task order (the work which was performed by Contractor B under a different contract).
.          YES     NO     Remarks: _____

[Retreadfed]

1 hour ago, Govie said:

They billed for actual quantities. Since they hadn't received the minimum quantities, at the end of the contract they billed the difference. 

Just to be clear, are you saying that the government did not issue task orders to cover the minimum quantity stated in the contract for each period?  Did the task orders which the government did issue cover the work at the facility where contractor B performed?  Finally, does the contract have a clause in it that says what the contractor is entitled to be paid if the minimum quantities are not ordered?  Such a clause would not be a FAR clause.

As an aside, a requirements contract does not have a minimum amount the government is bound to order.

[Govie]

They did issue task orders each period to cover the minimum quantity.

Yes, the task order covered the work at the Facility where Contractor B performed.

The contract stated that minimum quantities SHALL be ordered.

Then, can I assume since a minimum quantity was required it is not a requirements contract?

 

Edited October 25, 2019 by Govie
Correct SOW to Task Order

[Govie]

1 hour ago, ji20874 said:

The first step on the correct path forward is to accurately relate the facts.  Here are some questions to help...

1.  The Government awarded an indefinite-delivery indefinite-quantity (IDIQ) contract to Contractor A which provided for work at five government facilities and included the clause at FAR 52.216-22, Indefinite Quantity.
.          YES     NO     Remarks: _____

2.  The Government also issued a task order to Contractor A.  
.          YES     NO     Remarks: _____

3.  The task order purchased the minimum quantity for work at one of the five government facilities.
.          YES     NO     Remarks: _____

4.  Contractor A successfully performed the work for the task order.
.          YES     NO     Remarks: _____

5.  Contractor A invoiced for the work performed on the task order.
.          YES     NO     Remarks: _____

6.  The Government paid Contractor A for the work performed on the task order.
.          YES     NO     Remarks: _____

7.  No other task orders were issued. 
.          YES     NO     Remarks: _____ Not on this contract. All TO were issued to Contractor A.

8.  Contractor A also invoiced for the work for which it was never issued a task order (the work which was performed by Contractor B under a different contract).
.          YES     NO     Remarks: _____Expecting them to do it.

 

[Retreadfed]

3 hours ago, Govie said:

They billed for actual quantities. Since they hadn't received the minimum quantities, at the end of the contract they billed the difference.

 

1 hour ago, Govie said:

They did issue task orders each period to cover the minimum quantity.

These two statements are inconsistent with each other.  Can you clarify?

 

1 hour ago, Govie said:

Yes, the SOW covered the work at the Facility where Contractor B performed, the facility was listed in the SOW.

Please note that I asked about a task order not the SOW in the contract.

[ji20874]

Why did the Government refuse to pay the invoice to Contractor A for the work Contractor A did under the task order?

[Govie]

They state they want a REA submitted. No other reason given.

[joel hoffman]

Ok so you said that they were issued a task order for the minimum obligation each year. 

You said they performed the task order(s) for the minimum amount. ***

You must pay them for what they were tasked to perform and successfully performed. If you don’t, it is a breach of contract. 

Unless the contract says so, It isn’t a requirements contract. They weren’t guaranteed exclusive right to perform the work at the site where you said they were NOT issued a task order(s) and another contractor B performed the work.
 
if you issued task orders for work at certain locations but they were prevented from performing at those sites, you may well have a problem, possibly a govt breach unless you can get by with a constructive government partial TFC.  

Don’t you have a government lawyer who can sort all this out?  We don’t have the contract in front of us. 

In the future, You don’t need to include minimum obligations for each option year- unless your agency requires that you do that.  Your lawyer can do the case law research and advise you. 

My answers are based upon my understanding of the actual circumstances, I hope that those are the actual circumstances. I apologize but your descriptions are confusing.

Good luck! 

** this is the confusing part. You said they were issued task orders for the minimum obligation. They successfully performed the task orders - but actual quantities may or may not equal or exceed the contract minimum obligation.  You didn’t explain what the task order were for or how they were priced or why actual quantities were less than the amount in the task order(s). Maybe I missed that. 

Then you said that they weren’t issued a task order for one of the sites (for one year? For each year?) but the task order(s) were still for the minimum amount. 

It appears like the task orders were for unit priced quantities effort or supplies on some basis of demand or needs of the sites. Is that true?  

For at least one site, another contractor augmented either labor or supplies or something... is that true? Did that affect actual quantities such that they were less than the estimated quantities in the task order(s)? 

Edited October 25, 2019 by joel hoffman
Clarifications.

[Govie]

2 hours ago, joel hoffman said:

Ok so you said that they were issued a task order for the minimum obligation each year. 

You said they performed the task order(s) for the minimum amount. ***

You must pay them for what they were tasked to perform and successfully performed. If you don’t, it is a breach of contract. 

Unless the contract says so, It isn’t a requirements contract. They weren’t guaranteed exclusive right to perform the work at the site where you said they were NOT issued a task order(s) and another contractor B performed the work. (The Task Order did include the site that Contractor B performed the work).
 
if you issued task orders for work at certain locations but they were prevented from performing at those sites, you may well have a problem, possibly a govt breach unless you can get by with a constructive government partial TFC.  (PT4C was issued to Contractor A 10 months into the last POP reducing quantities, not POP)

Don’t you have a government lawyer who can sort all this out?  We don’t have the contract in front of us. 

In the future, You don’t need to include minimum obligations for each option year- unless your agency requires that you do that.  Your lawyer can do the case law research and advise you. 

My answers are based upon my understanding of the actual circumstances, I hope that those are the actual circumstances. I apologize but your descriptions are confusing.

Good luck! 

** this is the confusing part. You said they were issued task orders for the minimum obligation. They successfully performed the task orders - but actual quantities may or may not equal or exceed the contract minimum obligation.  You didn’t explain what the task order were for or how they were priced or why actual quantities were less than the amount in the task order(s). Maybe I missed that. (All task orders were executed and it appears previous CO may have coordinated with Contractor B to ensure Contractor A only received quantities less than the minimums.

Then you said that they weren’t issued a task order for one of the sites (for one year? For each year?) but the task order(s) were still for the minimum amount. (The task order for all years were for the mins-they all included the site where Contractor B was performing a large portion of the work).

It appears like the task orders were for unit priced quantities effort or supplies on some basis of demand or needs of the sites. Is that true?  Yes.

For at least one site, another contractor augmented either labor or supplies or something... is that true? Did that affect actual quantities such that they were less than the estimated quantities in the task order(s)? (Tremendously! Contractor A received about 20% of the actual work load).

 

[Retreadfed]

41 minutes ago, Govie said:

PT4C was issued to Contractor A 10 months into the last POP reducing quantities, not POP)

Did contractor A file a termination settlement proposal in response to the T4C?  If so, what is the status of the proposal?  Was the T4C retroactive to the beginning of the contract or some other period prior to it being issued? Did it also file an REA to compensate it for the effect the T4C had on the cost of performing the other work?

[ji20874]

7 hours ago, Govie said:

They state they want a REA submitted. No other reason given.

Govie,  If this answer is the best you can do, then no one here can help you.  We cannot have an intelligent conversation unless (1) you understand the story, and (2) you can relate the story to us.  It seems you are unsuccessful in both.

Advice:  Please do not answer questions or add information inside a quotation box -- it is better to show your own text this way, below a quotation box.

[Govie]

8 minutes ago, Retreadfed said:

Did contractor A file a termination settlement proposal in response to the T4C?  If so, what is the status of the proposal?  Was the T4C retroactive to the beginning of the contract or some other period prior to it being issued? Did it also file an REA to compensate it for the effect the T4C had on the cost of performing the other work?

 

8 minutes ago, Retreadfed said:

Did contractor A file a termination settlement proposal in response to the T4C?  If so, what is the status of the proposal?  Was the T4C retroactive to the beginning of the contract or some other period prior to it being issued? Did it also file an REA to compensate it for the effect the T4C had on the cost of performing the other work?

No termination settlement proposal was submitted. 

[formerfed]

Based upon the confusing information presented, Joel’s response is the best anyone can do.  No one here understands the situation well enough to respond.  Govie, since you don’t know why your management wanted a REA submitted, it’s apparent you don’t know the full story either.

One thing I hope you and other readers learned from this is never write a similar type contract.  

[Govie]

I didn’t write the contract. I am CO #6 on this contract.

[ji20874]

28 minutes ago, Govie said:

I am CO #6 on this contract.

Oh, no.  When the judge at the board of contract appeals asks why you refused to make payment on work that had been performed under a task order, you will have to give an answer in the first person:  "I refused to make payment because _____."  

Hint:  You will not be allowed to say "...because my higher-ups said so."  Your higher-ups and your agency attorneys will not allow you to submit such an answer.  As the contracting officer, it is your decision to refuse payment -- you need to know why you made you decision.

[joel hoffman]

Please use an agency attorney - please!!