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42 minutes ago, C Culham said:

So let me restate my position - In a commercial item contract you cannot unilaterally change the performance period of the contract unless such action is taken pursuant to a specific clause of the contract.

I guess it depends on what you mean by "pursuant."  If a clause in a commercial contract is cited as recognizing the availability of rights and remedies under common law, is the action taken under common law, or under the clause?

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The Government's right to reestablish a delivery schedule where the Government may have waived the delivery schedule need not be based on the Changes clause.

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Appellant's argument is apparently based on there being no delivery date agreed to by the parties. However, valid delivery dates can be established by means other than a bilateral agreement. The binding effect of the schedule is not abrogated because it was never the subject of a formal contract modification. When the contract delivery date has not been met and the contract is not default terminated, the Government's subsequent exercise of its rights under the Default clause requires the establishment of a new delivery date that must be reasonable and specific. The new schedule may be established by various means short of a contract modification.

Sermor, Inc., ASBCA Nos. 30576, 33176, 33179, 94-1 BCA ¶ 26,302, at 130829, citing Simplex Manufacturing Corp., ASBCA No. 13897, 14380, 71-1 BCA ¶ 8814 & Max M. Goldhaber, ASBCA Nos. 8277, 8370, 65-2 BCA ¶ 5083 (emphasis added).

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21 minutes ago, Jacques said:

The Government's right to reestablish a delivery schedule where the Government may have waived the delivery schedule need not be based on the Changes clause.

Sermor, Inc., ASBCA Nos. 30576, 33176, 33179, 94-1 BCA ¶ 26,302, at 130829, citing Simplex Manufacturing Corp., ASBCA No. 13897, 14380, 71-1 BCA ¶ 8814 & Max M. Goldhaber, ASBCA Nos. 8277, 8370, 65-2 BCA ¶ 5083 (emphasis added).

Look I read it.  Did you.....

It's because of a default.  The government may not change the date otherwise OR IN OTHER WORDS ABSENT A DEFAULT.  Your arguement that this decision applies in general to any change to a commercial item contract is misplaced.  There MUST be a contract term/condition that allows exercise of either parties unilateral right otherwise it is not allowed.

And I quote what you quote

"the Government's subsequent exercise of its rights under the Default clause requires the establishment of a new delivery date that must be reasonable and specific. The new schedule may be established by various means short of a contract modification."

 

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12 minutes ago, C Culham said:

Look I read it.  Did you.....

Yes, I did.  I'm not sure there is anything I've said in this thread with which you disagree.  Likewise, I don't think I've said that anything you have said (or a reader could reasonably infer from what you've said, because, to be honest, I have a hard time following you) is incorrect.  We may just be emphasizing different things.

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3 hours ago, C Culham said:

The government may not change the date otherwise OR IN OTHER WORDS ABSENT A DEFAULT.

Carl, we have only been talking about unilaterally establishing a new delivery date in the context of a contractor's potential default.  In this regard, if a contractor goes into default, and the government does not terminate in a reasonable amount of time so that the government waives the original delivery date, technically the contractor is not in default since the delivery date has been waived.  In this case, the government has also waived its right to terminate for non-performance because the delivery date has been waived.  In order to reinstate its right to terminate for default due to non-performance, the government must establish a new delivery date.  There is no FAR clause, either for commercial item contracts or non-commercial item contracts that specifically addresses the government's right to unilaterally establish a new delivery date.  However, it is an accepted practice, and one that has been sanctioned by the appeals boards and courts, that the government has such a unilateral right.  This is a matter of equity, not a contract clause.  Simply put, the government does not need a contract clause to reestablish a delivery date when the contractor goes into default.  There is no logical reason why this equitable principle should not apply to contracts for commercial items as well as contracts for non-commercial items.

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7 hours ago, jwomack said:

Any unilateral change to the POP would be considered a government offer.  If the KTR rejected the offer then T4D based on the contractually established POP would be appropriate and allowable

In the context of a contractor's default, the unilateral establishment of a new delivery date is not an offer for the contractor to accept.  Once the government sets a new date, the contractor is bound to comply or face a default termination.  The government cannot terminate a contract based on the original delivery date, because that date has been waived.  Waiver is a precondition to the government being able to set a new delivery date.

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16 hours ago, Retreadfed said:

Once the government sets a new date, the contractor is bound to comply or face a default termination.  The government cannot terminate a contract based on the original delivery date, because that date has been waived.

The Government can unilaterally establish a new delivery date, and the contractor is bound to that date, even when the contract doesn't allow for such changes?  That's a new one.  Good luck with enforcement.

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The contractor is actually bound to provide the service or product and contractually agreed to do it by a certain date - which has passed. It doesn’t have the right to decide when or if it wants to complete the contract. The wording in the changes clause doesn’t grant it that right.

While everyone here is arguing about it, I’d hope that you have some legal counsel familiar with contract law and would be using it. 

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3 hours ago, C Culham said:

And the reference is Retreadfed said so?  Or is there more to this premise?

I obviously can't speak for @Retreadfed but we're talking about some well-established ideas here.  If the Government sets a new date, and that date is reasonable in light of the contractor's abilities, the contractor is bound to comply or face a default termination.  Rowe, Inc., GSBCA No. 14211, 2001-2 BCA ¶ 31,630.

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1 hour ago, jwomack said:

The Government can unilaterally establish a new delivery date, and the contractor is bound to that date, even when the contract doesn't allow for such changes?  That's a new one.  Good luck with enforcement.

So much confidence from @jwomack despite being so wrong.  At the risk of beating a dead horse, the changes provision in FAR 52.212-4 has NOTHING to do with reestablishing a delivery schedule where the Government may have waived an earlier missed delivery date.

It appears that @C Culham would argue that, because the Government once had rights to terminate the contract for cause, somehow either the termination for cause provision or the Disputes clause provides a place to look within the four corners of the contract for a "hook" for the Government's right to reestablish a new delivery schedule.  I don't think about it in those terms, because the whole idea that the Government can WAIVE its rights and remedies under the termination for cause provision is ultimately grounded in largely equitable principles expressed in case law.  Not surprisingly, the downstream consequences of that waiver, and how to recover from that waiver, are likewise grounded in case law.

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The clause at 52.212-4 discusses liability for default for non performance as well as termination for default . The owner (govt) can take other actions short of Default Termination. Not sure if the time extension is for excusable delays but the clause covers that as well.

A lawyer can provide advice on alternatives available to an owner short of termination for breach of contract - failure to perform with inexcusable delays.

At any rate, the contract doesn’t require and the contractor doesn’t necessarily have to “agree” with the owner’s actions that are short of a TFD. If the contractor disagrees it can submit a claim. 

Im guessing that the reason that the time extension is not covering the entire delay is that it covers what the government considers to be excusable. 

 

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On 12/14/2019 at 8:55 AM, FAR-flung 1102 said:

So, what are your recommendations...In unilaterally establishing the new delivery date what mod authority might the Government cite?

You can reestablish a delivery schedule with a notice. You don’t need to cite a clause. 

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On 11/25/2019 at 2:52 PM, rios0311 said:

Editing to add: We can terminate for failure to make progress or provide adequate assurance of performance. But can we re-establish the delivery schedule unilaterally?

Yes. You said that the government acknowledges 30 days extension excusable due to forbearance or neglect or whatever. Cite 52.212-4 (f), which is “Excusable delays”.

The contractor doesn’t have to agree with the 30 day time extension.

In my opinion, you need to do it formally by modification and issue it unilaterally, if necessary.  For goodness sakes, if you are going to do this or anything else at this point, use your lawyer. 

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1 hour ago, Jacques said:

You can reestablish a delivery schedule with a notice. You don’t need to cite a clause. 

Don’t do that in this situation. Clean up your contract administration and cite the clause Reference that discusses excusable delays. 52.212-4 (f). Unilateral if necessary. 

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I suppose citing the clause and using 30 day excusable delay works.  But it’s a real stretch considering the agency allowed seven months to go by without a justifiable reason.  Rather than get into that I would just follow Jacques advice and just send a notice.  By the way I don’t think the OPs lawyer is much help from what’s been said.

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9 hours ago, formerfed said:

I suppose citing the clause and using 30 day excusable delay works.  But it’s a real stretch considering the agency allowed seven months to go by without a justifiable reason.  Rather than get into that I would just follow Jacques advice and just send a notice.  By the way I don’t think the OPs lawyer is much help from what’s been said.

I think that the OP’s questions have been answered. Unilateral Mod or no mod, the answer is yes. And it isn’t based upon the “changes” provisions in 52.212-4. No bi-lateral agreement required. 

Based upon some of the stated circumstances, it appears that the program office is in control here and the KO and it’s counsel, if any(???) are observers.

Devito information: http://publiccontractinginstitute.com/was-your-delivery-date-waived-was-your-default-termination-improper/

Somebody better establish some deadline, considering whatever progress is being made to complete this contract. If the program office has changed any technical requirements during all this “working with” period, the government may have lost all control over possible ramifications. 

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  • 4 weeks later...

I appreciate everyone's feedback and the discussion, and I regret that I did not check back here to contribute further before going on holiday. Here's what we did shortly after my last post:

1. Cure notice is not required for late delivery, but we issued what amounts to a cure notice, which specified the deficiencies, provided a new delivery date with 30-days to correct the deficiencies,  and advised of possible termination for cause.

2. Because we could not afford a gap in performance of the critical  IT system, we procured a replacement system as a backup in anticipation of needing to transition to it. Because we were unsure whether the current contractor would come through and deliver, we structured the replacement contract with a base period consisting only of the configuration and implementation phase. Exercising the first option would place the system into production (full operation).

3. When we did not receive the completed IT system on the new delivery date, we issued a show-cause notice, which informed the contractor that we planned to terminate the contract for cause, unless the contractor showed cause why we should not terminate on that basis.

3. The contractor did not show adequate cause for late delivery, so we decided to terminate the contract and will exercise the option on the replacement solution to bring it online while we transition off the deficient system. We will leave corresponding past performance and will pursue re-procurement costs.

 

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1 hour ago, Retreadfed said:

What entitles you to do this when procuring commercial items?

I can't speak for rios, but I note that the termination for cause paragraph of the clause at FAR 52.212-4 includes, "the Contractor shall be liable to the Government for any and all rights and remedies provided by law."  And FAR 12.402(c)(2) says, "The Government's preferred remedy will be to acquire similar items from another contractor and to charge the defaulted contractor with any excess reprocurement costs together with any incidental or consequential damages incurred because of the termination."  These seem to provide entitlement.

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They incurred the reprocurement costs prior to both the “show cause” and the termination, not “due to the termination”. A technicality but case law is full of loopholes due to technicalities. 

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2 hours ago, ji20874 said:

all rights and remedies provided by law." 

What rights and remedies are provided by law in the commercial market place?  Isn't this generally a matter of state law?  While 12.402 may say what the government's preferred remedy is, 12.402 is not a part of the contract and we don't know what provides for this remedy "by law" as required by 52.212-4.  Are you saying that 12.402 is the law in question?

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Breach of contract damages would seem to be applicable to commercial contracts for failure to perform but that’s a matter for the lawyers to determine.

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