Defacto T4C

[here_2_help]

From the Aviation Week Ares blog --

During his March 22 speech, O'Reilly slammed contractors for a lax culture and inattention to detail. And, he said he's withholding funding from at least one for just that reason.

?I have got to cut off funding, and I have done that in some cases recently,? says O?Reilly, who is widely known as a demanding leader.

?If I don?t, you are not going to take it seriously, and I believe if I do, you will take it seriously, and I believe this industry team can do it.?

But, he didn't call the contractor out by name.

It is, however, Coleman Aerospace, owned by L-3 Communications. The company has had problems with its C-17-launched ballistic missile target. Most recently, the target plummeted into the Pacific after a malfunction. This brought the last Terminal High-Altitude Area Defense (Thaad) to a halt.

O'Reilly sent in a quality control team that apparently found major problems at the company. Shortly thereafter, he informed company officials via letter that he was cutting them off from the MDA purse.

During a February budget briefing, Altwegg said there was a "big time" quality issue with this particular target.

I'm not exactly sure how to interpret MDA's action. It sounds like the agency may have stopped incrementally funding the contractor. But if there is authorized work in process, doesn't the work eventually have to be funded, unless there is a Term for Convenience (or Default)? Also, "cutting them off from the MDA purse" sounds a bit like a de facto suspension with regard to that particular agency. Is that even kosher?

I'm wondering if an agency can simply "cut-off" funding without doing anything else? Doesn't that sound a bit, well, strange?

Or am I straining at nothing?

Thanks for the help.

[Guest Vern Edwards]

I'm wondering if an agency can simply "cut-off" funding without doing anything else? Doesn't that sound a bit, well, strange?

I will assume that the contract is cost-reimbursement and incrementally funded. That being the case, the contract must include the Limitation of Funds clause at FAR 52.232-22. That clause says, in part:

(e) If, after notification [that additional costs would exceed the funding limitation], additional funds are not allotted by the end of the period specified in the Schedule or another agreed upon date, upon the Contractor's written request the Contracting Officer will terminate the contract on that date in accordance with the provisions of the Termination clause of this contract...

It appears from the clause that the contract is supposed to be formally terminated if the government decides to stop funding it, and that the contractor will not be left twisting in the wind. I don't know what a court of board would do if the contractor disputed that course of action. I don't know that the government is required to formally terminate.

[here_2_help]

I will assume that the contract is cost-reimbursement and incrementally funded. That being the case, the contract must include the Limitation of Funds clause at FAR 52.232-22. That clause says, in part:

It appears from the clause that the contract is supposed to be formally terminated if the government decides to stop funding it, and that the contractor will not be left twisting in the wind. I don't know what a court of board would do if the contractor disputed that course of action. I don't know that the government is required to formally terminate.

Thanks Vern. So the contractor performs up to funding and then stops. I don't have a problem with that.

H2H

[brian]

.

My impression, at the PEO level, folks in charge do whatever they want, almost without regard for what's within the 4 corners,

and the Contract Admin types scurry around to make it look compliant.

Contractor Execs who have little invested, compared to a private venture, making ROI's in the ballpark of 40% (that's possible even when weighted guidelines say that "profit" is only 8.2%)

are more than happy to get jerked around by loose cannons, so long as the profitability on which their bonus is based stays up in the stratosphere.

.