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I have inherited a T&M contract with labor hour clins.  In May there was 1.5 million obligated onto the labor hour clin.  In June the CO issued a an RFQ for a FFP requirement.  July 1st the CO issued a NTP for 1.05 Million for the FFP requirement.  Due to circumstances only 350K was expended prior to a stop work being issued in Aug.  No additional money was provide outside of the labor hour money already on the contract.  No modification was completed to formalize the NTP.  in November the contract CO was changed (yeah me) and it was determined that the contractor was holding the invoice from the NTP as well as the fact that there was no longer any money in the labor hour CLIN.  The CO immediately issued a stop work and asked for additional funds, as well as working to formalize the NTP.  Funding was provided but do I have a an ADA violation on the authorization to proceed or does the fact that their was money on the T&M clin cover the CO? 

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36 minutes ago, ji20874 said:

You don’t seem to have an ADA violation.

It seems you just need to negotiate the final price and pay the contractor whatever you owe.

I might tend to agree but what if the money for the T&M CLIN is different color than that for the FP? 

My tendency to agree also is based on a view that an ADA violation hardly happens at a contract level other than those subject to specific appropriation language.  Without details I then wonder if this specific matter is an issue of unauthorized commitment rather than a ADA matter.

To the OP I suggest a internet search of "examples of ADA violation".  Maybe add a "+ DoD" to the search.  The hits that will occur will undoubtedly assist in understanding application of the ADA.

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Amazing. Must not be using automated Contracting software. Otherwise how does one add a CLIN for $1.05 million and increase the contract amount by that much with no funding? 

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8 hours ago, joel hoffman said:

Amazing. Must not be using automated Contracting software. Otherwise how does one add a CLIN for $1.05 million and increase the contract amount by that much with no funding? 

By issuing a NTP and not actually formalizing the modification. (so it never was never actually written into the contract writing system.)

 

 

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2 hours ago, Kimberly C said:

By issuing a NTP and not actually formalizing the modification. (so it never was never actually written into the contract writing system.)

 

 

 There were administrative violations of government policy for change orders and using money obligated for T&M line item for FFP work but perhaps not ADA.

That KO needs some major remedial training before being assigned another contract.

”43.201   General.

(a) Generally, Government contracts contain a changes clause that permits the contracting officer to make unilateral changes, in designated areas, within the general scope of the contract. These are accomplished by issuing written change orders on Standard Form 30, Amendment of Solicitation/Modification of Contract (SF 30), unless otherwise provided (see 43.301).

(b) The contractor must continue performance of the contract as changed, except that in cost-reimbursement or incrementally funded contracts the contractor is not obligated to continue performance or incur costs beyond the limits established in the Limitation of Cost or Limitation of Funds clause (see 32.706-2).

(c) The contracting officer may issue a change order by electronic means without a SF 30 under unusual or urgent circumstances, provided that the message contains substantially the information required by the SF 30 and immediate action is taken to issue the SF 30.

[48 FR 42386, Sept. 19, 1983, as amended at 78 FR 37689, June 21, 2013; 81 FR 83099, Nov. 18, 2016]”

 

 

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"In May there was 1.5 million obligated onto the labor hour CLIN."  Why?  Were the prerequisites for recording an obligation met at that time, or was the money just parked there?  Obviously $1.05M is less than $1.5M, so if the money was just parked, that would suggest you weren't antideficient.  However, your facts aren't entirely clear, because you also write, "In November...it was determined...there was no longer any money in the labor hour CLIN."  I am not prepared to speculate as to what this means, but it certainly casts doubt that the entire $1.5M was available for the effort that was the subject of the "notice to proceed."

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According to the original post, contract was funded for time and material CLINs. There apparently were no firm fixed price line items. 

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The original poster has not said anything about a change order.

We don't know what rules were violated, if any -- but almost certainly, there was no ADA violation.  I think Kimberly just needs to negotiate the final price and pay the contractor whatever the Government owes.

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8 minutes ago, ji20874 said:

The original poster has not said anything about a change order.

We don't know what rules were violated, if any -- but almost certainly, there was no ADA violation.  I think Kimberly just needs to negotiate the final price and pay the contractor whatever the Government owes.

We also don’t know whether the firm fixed price work was within the scope of the contract. If that is the case there’s even more problems associated with this action. Could possibly be considered a letter contract without any justification for other than full and open competition or any funding provided.

Just speculation due to the lack of complete details.

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@Kimberly C, please share with us your facts as they relate to paragraphs (d) & (e) of the Payments under Time-and-Materials and Labor-Hour Contracts at FAR 52.232-7.  Your original post says, "In June the CO issued a an RFQ for a FFP requirement.  July 1st the CO issued a NTP for 1.05 Million for the FFP requirement."  Explain whether you think your LH CLIN is relevant to this, and, if so, why.  Did the contract include any clauses applicable solely to FFP efforts?  Did it include the DFARS Limitation of Government Obligation clause?  Did the "notice to proceed" discuss anything related to incremental funding?

 

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1 hour ago, ji20874 said:

The original poster has not said anything about a change order.

We don't know what rules were violated, if any -- but almost certainly, there was no ADA violation.  I think Kimberly just needs to negotiate the final price and pay the contractor whatever the Government owes.

Agree.  ADA violations are serious; fixing what is wrong here is easy.  There isn’t an ADA violation.  Maybe nothing is wrong.  If the contract doesn’t have a FFP, just document why it’s added or the contract is reformed - decided that the contractor should assume greater risk with contract type.  If justification for use of a letter contract is needed, just do it.  Do anything that’s needed and get the contractor paid.

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18 minutes ago, formerfed said:

Agree.  ADA violations are serious; fixing what is wrong here is easy.  There isn’t an ADA violation.  Maybe nothing is wrong.  If the contract doesn’t have a FFP, just document why it’s added or the contract is reformed - decided that the contractor should assume greater risk with contract type.  If justification for use of a letter contract is needed, just do it.  Do anything that’s needed and get the contractor paid.

I don't think we know enough to say that there wasn't a potential ADA violation that requires correction.  If the parties understood the "notice to proceed" related to a firm fixed priced effort, and the contract didn't include any funding for that FFP effort, then there may have been an obligation without funds to cover it.  Now, it may be easy to fix, for instance, if the ceiling on the LH CLIN can be adjusted downward and the funds used on the new FFP CLIN, but obviously all that amounts to taking corrective action for what would, in the absence of that corrective action, be a potential ADA violation.

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A lot of confusion and misunderstandings exist about ADA.  Violations occur when agencies exceed their appropriations or subdivisions. If the agency has proper funding, an obligation like a contract or modification that goes over what’s in a requisition or commitment isn’t an ADA violation.  
 

Examples of ADA violations are spending more than what’s appropriated, exceeding an OMB apportionment, buying an airplane when it’s not in the appropriation, etc.  

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Jacques,

Even if what you wrote is what actually occurred, that doesn’t create an ADA violation.  All of your potential corrective actions do not point to an ADA violation.  The prior contracting officer might have been hasty, or might have done something akin to an unauthorized commitment (as Carl suggested) or some other process irregularity, or might not have “[o]btain[ed] written assurance from responsible fiscal authority that adequate funds are available” as required by FAR 32.702(a), but none of these creates an ADA violation.  So based on experience and what the original poster has shared, I am pretty confident that the likelihood of an ADA violation is very small, even negligible — not worth pursuing.

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1 hour ago, ji20874 said:

Jacques,

Even if what you wrote is what actually occurred, that doesn’t create an ADA violation.  All of your potential corrective actions do not point to an ADA violation.  The prior contracting officer might have been hasty, or might have done something akin to an unauthorized commitment (as Carl suggested) or some other process irregularity, or might not have “[o]btain[ed] written assurance from responsible fiscal authority that adequate funds are available” as required by FAR 32.702(a), but none of these creates an ADA violation.  So based on experience and what the original poster has shared, I am pretty confident that the likelihood of an ADA violation is very small, even negligible — not worth pursuing.

Don't get me wrong:  It takes a lot for a potential ADA violation to ultimately end up resulting in an actual ADA violation.  If all you are saying is that you predict adequate funds of the proper year and color will ultimately be found, there's nothing in the facts that would suggest otherwise, so that may be a reasonable prediction.

The reasonableness of that prediction likely isn't significantly impacted either way by the facts as I understand them related to the existing labor-hour CLIN.  Until @Kimberly C comes back with more information--e.g., suggesting that what she has been calling the FFP effort really wasn't intended to be FFP--the discussion related to the labor-hour CLIN strikes me as nothing more than a wild goose chase.  This is especially true given her statement,  "In November...it was determined...there was no longer any money in the labor hour CLIN."  Recall To the Hon. Bill Alexander, B-213137, 63 Comp. Gen. 422 ("In addition, we would consider an Antideficiency Act violation to have occurred where an expenditure was improperly charged and the appropriation fund source, although available at the time, was subsequently obligated, making re-adjustment of accounts impossible.")  For DoD, see also DoDFMR, Vol. 14, par. 100207.D. (when proper funds are continuously available, no actual ADA violation).

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DoDFMR, Vol. 14, Figure 2-2, para B.1.d lists among the examples of potential ADA violations, "failure to promptly record valid obligations...resulted in valid obligations that exceeded the available amount in the appropriation and resulted in a violation."  Maybe I'm reading the facts completely wrong, but we don't seem have the facts to conclusively determine one way or another whether this will end up resulting in an ADA violation.

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2 hours ago, Jacques said:

If all you are saying is that you predict adequate funds of the proper year and color will ultimately be found, there's nothing in the facts that would suggest otherwise, so that may be a reasonable prediction.

"will ultimately be found?"  In her original posting, Kimberly said that funding was already provided.

I know we don't have all the facts.  But still, I really doubt that Kimberly's agency has exceeded the amount available in its appropriation -- Kimberly has never even hinted at any such fact -- indeed, she said in her original posting that funding was provided.  In the absence of proof, I think it is reasonable to lean towards the likelihood of no ADA violation.  Nothing in the facts as Kimberly explains them points to an ADA violation.  Oh, by the way, if Kimberly's agency has exceeded the amount available in its appropriation, she may be sure that her agency comptroller will be calling very soon.  She can leave the ADA matter alone until the agency comptroller starts asking questions. 

I can't prove that the sun came up this morning (it has been cloudy all day), but based on experience and what I learned in high school, and discounting wild theoretical possibilities for such daylight as I can discern, I am content to lean towards the likelihood that the sun actually did come up this morning.  One doesn't need proof to make reasonable assumptions.  Kimberly has no duty to prove that there was or wasn't an ADA violation -- she just needs to administer her contract and get on with life.

You're not going to convince me that my assumption is unreasonable (I note that joel, carl, and formerfed also tend to agree that there probably was no ADA violation), and I suppose I'm not going to convince you that Kimberly shouldn't be making ADA accusations or spending her time gathering proof, based on the information she has shared.

Kimberly,

I hope this thread has been helpful to you.  At WIFCON, you get a diversity in opinions and retain complete responsibility for your own decision-making.  If you are still concerned about an ADA violation, please talk to your agency's procurement attorney for advice or to your inspector general to start an investigation. 

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@ji20874 , thanks for your latest post.  I didn't read the final sentence of the original post (OP) the way you have.  For some reason, I assumed the 'funding' that was 'provided' related to the LH effort, not the FFP effort.  If your read is correct, and it likely is, there are many extraneous facts in the OP.

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3 hours ago, Jacques said:

DoDFMR, Vol. 14, Figure 2-2, para B.1.d lists among the examples of potential ADA violations, "failure to promptly record valid obligations...resulted in valid obligations that exceeded the available amount in the appropriation and resulted in a violation."  Maybe I'm reading the facts completely wrong, but we don't seem have the facts to conclusively determine one way or another whether this will end up resulting in an ADA violation.

You’re not reading this properly.  The obligation wasn’t recorded and when it was, it exceeded the amount available in the appropriation.  The appropriation is stated in a funding bill and generally is a huge amount.  For example here is an example  https://appropriations.house.gov/news/press-releases/appropriations-committee-releases-fiscal-year-2020-homeland-security-funding

For an ADA violation to kick in, an obligation has to cause those amounts to be exceeded.  An exception is a violation violates a quaertky apportionment.  There are other exceptions but you get the idea.  

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14 hours ago, formerfed said:

You’re not reading this properly.

All I was reading it for was the proposition that failing to timely record an obligation increases the risk of an ADA violation, which hopefully is obvious.  

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2 hours ago, Jacques said:

All I was reading it for was the proposition that failing to timely record an obligation increases the risk of an ADA violation, which hopefully is obvious.  

Got it!  I believe the example about not properly recording an obligation involving a reserve personnel appropriation has to do with timing. There are several instances of ADA violations involving agencies not recording obligations including personnel including salaries, benefits, training and support prior to FY end.  When discovered there’s no money left.

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Maybe I was not clear.  let me try to clear things up:

May 2019 an option year was exercised and 1.5 million was obligated (partially funded) to the contract for work that is part of the contract (expected to be expended at approximately $200K per month).

June 2019 a RFQ was issued for additional work (within scope).

July 2019 the CO issued the NTP for 1.05 million with no additional funds being added to the contract (or received from the business unit).

The NTP was never codified into the contract via modification.

Funding was available at the agency level (not in the business unit). 

There was no additional ceiling on the contract available to incorporate the 1.05 million unless it was removed from option years as the contract ceiling was set per clin and per year basis.

 

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