UCA Definitization

[govconlaw]

We're trying to definitize an unpriced contract modification with a government agency and submitted a definitization proposal as directed by the agency The agency asked for an REA certification to go with our definitization proposal. Our thought is that a definitization proposal directed by the CO is not an REA. Any thoughts, opinions, or citations on this?

[Guest Vern Edwards]

We're trying to definitize an unpriced contract modification with a government agency and submitted a definitization proposal as directed by the agency The agency asked for an REA certification to go with our definitization proposal. Our thought is that a definitization proposal directed by the CO is not an REA. Any thoughts, opinions, or citations on this?

1. Is the contract with DOD?

2. What kind of unpriced contract modification was it? Was it within the scope of the contract and pursuant to a contract clause, or was it for additional supplies or services outside the scope of the contract?

3. You say that you submitted a definitization proposal "as directed." Under what contract term did the government direct you to submit a definitization proposal?

4. What does your definitization proposal propose? Does it propose an adjustment to the contract price?

[govconlaw]

1. Is the contract with DOD?

ANS--Yes

2. What kind of unpriced contract modification was it? Was it within the scope of the contract and pursuant to a contract clause, or was it for additional supplies or services outside the scope of the contract?

ANS--Additional work within scope and pursuant to changes clause (52.243-2)

3. You say that you submitted a definitization proposal "as directed." Under what contract term did the government direct you to submit a definitization proposal?

ANS--the contract mod directed submission of definitization proposal

4. What does your definitization proposal propose? Does it propose an adjustment to the contract price?

ANS--Adjustment to the contract price lower than the NTE contained in the unpriced contract mod that directed the additional work

[Guest Vern Edwards]

I applaud your thinking that there is a difference between a "request for equitable adjustment," on the one hand, and a "definitization proposal" submitted at the government's direction, on the other, and that DFARS 243.204-70 and the clause at DFARS 252.243-7002 do not apply to a definitization proposal. I suspect that you have already done some legal research and could not find anything that validated your thinking. I couldn't, either.

It's an interesting notion, and an intriguing, even appealing one. I doubt it will work. Every REA requests/proposes a definitization. But I wish you good luck. I am in favor of anything that works to undermine the stupid certification requirements that Congress has forced upon DOD and its contractors. Let us know how you come out.

[govconlaw]

I applaud your thinking that there is a difference between a "request for equitable adjustment," on the one hand, and a "definitization proposal" submitted at the government's direction, on the other, and that DFARS 243.204-70 and the clause at DFARS 252.243-7002 do not apply to a definitization proposal. I suspect that you have already done some legal research and could not find anything that validated your thinking. I couldn't, either.

It's an interesting notion, and an intriguing, even appealing one. I doubt it will work. Every REA requests/proposes a definitization. But I wish you good luck. I am in favor of anything that works to undermine the stupid certification requirements that Congress has forced upon DOD and its contractors. Let us know how you come out.

Vern, thank you for confirming our thoughts--you are dead on the mark. We'll let you know how it comes out.

[joel hoffman]

Vern, thank you for confirming our thoughts--you are dead on the mark. We'll let you know how it comes out.

Well, the changes clause, among others, does technically require that the contractor assert its right for an equitable adjustment for directed or constructive changes to the contract...

[Guest Vern Edwards]

Well, the changes clause, among others, does technically require that the contractor assert its right for an equitable adjustment for directed or constructive changes to the contract...

Asserting a right to an adjustment is not necessarily the same as submitting an REA. Nothing in the changes clauses (except the Changes and Changed Conditions clause) requires the contractor to submit an REA.

[Guest carl r culham]

In the context of your question, a federal contract, I would view your conclusion regarding a ?definitization proposal? as being different than a request for equitable adjustment as simply an unfortunate play on words that was started by the CO requesting the definitization proposal.

You (and the Government) are seeking a equitable adjustment in the contract (FAR 43.204). Stating that your proposal for change in pricing is anything other than a request of equitable adjustment just does not hold water. Whether you or the CO want to call your submission leading to accomplishment of a bilateral modification a ?proposal for blue water? the underlying fact is, the proposed adjustment that is sought is, by definition of the FAR, is a equitable adjustment (FAR 43.102(a)). Therefore the definitization proposal is equal to and in fact a request for equitable adjustment.

I would pose a couple of different examples.

Let?s say there was no change order yet you believe a change has occurred and you submit a "definitizaton proposal? in excess of $100K that outlines your want for an adjustment in contract price. Further you propose the adjustment be made by a bilateral modification. I, as the CO, then poses the question to this forum as to whether I should request certification or not. What do you believe the response would be?

As further example the thread mentions the Changes or Changed Conditions clause . This clause stipulates that a ?proposal for adjustment? is to be submitted before the CO makes an equitable adjustment to the contract. In a contract with this clause only would the CO be within their right to ignore a request from a contractor if the contractor titled their document as a ?request for equitable adjustment??

You want the CO to ignore the certification requirement on the basis of how both of you and the CO term your request (?proposal?) but I do not think you would want the CO to ignore any request you make for an equitable adjustment no matter what what you might call it, with or without CO direction.

Conclusion ? Submit the certification.

[joel hoffman]

Asserting a right to an adjustment is not necessarily the same as submitting an REA. Nothing in the changes clauses (except the Changes and Changed Conditions clause) requires the contractor to submit an REA.

I searched through Nash and Cibinic's "Administration of Government Contracts" the other day but couldn't find any discussion of the DoD certification and didn't have time to search the US Code for the date of the law that implemented it, but I'm pretty sure we were requiring the certification back around 1980, before FAR. I have thrown away my old class notes. But I remember being told that we required change proposals exceeding $100k to be certified to strengthen the application of the False Claims and False Statements acts in the event the contractor falsified factual data. It wasn't our choice whether or not to require the certification. I don't remember the origin or cause, but I imagine the weapons programs were the source.

I do remember this language confusing both contractor and government personnel, who often equated the action with a claim, when they were actually just working through change orders and government requests for change proposals. Back then the preponderance of our construction contract changes were less than $100k.I think I still have a copy of the DAR or ASPR somewhere at home. I would look it up when I get home later this week but hopefully this topic will be stale by then.

[Retreadfed]

I searched through Nash and Cibinic's "Administration of Government Contracts" the other day but couldn't find any discussion of the DoD certification and didn't have time to search the US Code for the date of the law that implemented it, but I'm pretty sure we were requiring the certification back around 1980, before FAR. I have thrown away my old class notes. But I remember being told that we required change proposals exceeding $100k to be certified to strengthen the application of the False Claims and False Statements acts in the event the contractor falsified factual data. It wasn't our choice whether or not to require the certification. I don't remember the origin or cause, but I imagine the weapons programs were the source.

I do remember this language confusing both contractor and government personnel, who often equated the action with a claim, when they were actually just working through change orders and government requests for change proposals. Back then the preponderance of our construction contract changes were less than $100k.I think I still have a copy of the DAR or ASPR somewhere at home. I would look it up when I get home later this week but hopefully this topic will be stale by then.

The statutory requirement to certify REA's in DoD came into bieng in 1994. You may be confusing the certification of cost or pricing data with the requirement to certify an REA. The TINA threshold has bounced back and forth between $100K and $500K. My recollection is that it was $100K in the early '80s.

One other observation regarding changes in regulations. At one time, the Changes clause required the contractor to submit an REA within a certain time frame. However, this language was amended to permit the contractor to assert its right to an equitable adjustment. I do not know whether there was any intended change to the substantive meaning of the clause or merely a wording change, however, from the face of it, there does appear to be a difference between assertion of a right to an adjustment and submission of a proposal. In this regard, see FAR 52.249-2(l).

[Guest Vern Edwards]

Prior to the August 1987 change, the August 1984 version of the Changes clause had read as follows:

(a) The Contracting Officer may at any time, by written order, and without notice to the sureties, if any, make changes within the general scope of this contract in any one or more of the following:

(1) Drawings, designs, or specifications when the supplies to be furnished are to be specially manufactured for the Government in accordance with the drawings, designs, or specifications.

(2) Method of shipment or packing.

(3) Place of delivery.

( If any such change causes an increase or decrease in the cost of, or the time required for, performance of any part of the work under this contract, whether or not changed by the order, the Contracting Officer shall make an equitable adjustment in the contract price, the delivery schedule, or both, and shall modify the contract.

( c) The Contractor must submit any "proposal for adjustment" (hereafter referred to as proposal) under this clause within 30 days from the date of receipt of the written order. However, if the Contracting Officer decides that the facts justify it, the Contracting Officer may receive and act upon a proposal submitted before final payment of the contract.

(d) If the Contractor's proposal includes the cost of property made obsolete or excess by the change, the Contracting Officer shall have the right to prescribe the manner of the disposition of the property.

(e) Failure to agree to any adjustment shall be a dispute under the Disputes clause. However, nothing in this clause shall excuse the Contractor from proceeding with the contract as changed.

(End of clause)

The language of paragraph ( c) was changed by FAC 84-29, 52 FR 30079, August 12, 1987. In the proposed rule, 51 FR 16462-01, May 2, 1986, the change to paragraph ( c) was explained as follows:

Under the current FAR coverage, the contractor must submit a proposal for adjustment within 30 days after receipt of a change order. Under the proposed revision, the contractor need only assert the right to an adjustment within the 30-day period.

The change was prompted by industry complaints that 30 days was not enough time to develop the information necessary for an REA. The FAC brought the language back to what it had been under the old Defense Acquisition Regulation and Federal Procurement Regulation and was much-welcomed by all.

[joel hoffman]

The statutory requirement to certify REA's in DoD came into bieng in 1994. You may be confusing the certification of cost or pricing data with the requirement to certify an REA. The TINA threshold has bounced back and forth between $100K and $500K. My recollection is that it was $100K in the early '80s.

I wasn't confusing the old TINA $100k dollar limit coverage with the earlier, separate DoD certification. Actually, the 1994 law you referred to was FASA, which repealed previously existing coverage, by moving and modifying the coverage of earlier statues dating back to PL 85-804 (1958!). See discussion and background of the later requirements at http://www.abanet.org/contract/federal/reg...gation_002.html. The discussion also mentions the confusion between certifications of requests for equitable adjustments and the certification for claims. I do remember the requirement being covered under Part 233 and later being moved to 243. But I'm pretty sure it was around long before 1994.

"...A similar clause, entitled "Certification of Claims and Requests for Adjustment or Relief," previously existed at DFARS 252.233-7000. The previous clause implemented 10 U.S.C. ? 2410e, which required contractor certification of claims, requests for equitable adjustment, and requests for relief under Public Law 85-804. Section 2301 of FASA repealed 10 U.S.C. ? 2410e and amended 10 U.S.C. ? 2410(a) to "make it clear" that DoD-unique certification requirements apply only to requests for equitable adjustment and requests for relief under Public Law 85-804. See H.R. Rep. No. 103-712, at 202 (1994). In making these changes, Congress contemplated that provisions of the Contract Disputes Act of 1978 ("CDA") would continue to govern the certification of "claims" on a government-wide basis. Id."

I suspect that a more academic research on the original DoD requirement might well lead back to the Rickover era of early nuclear ("atomic") submarine development program and his battles with industry! I'm away from home, very busy and my paralegal and memory skills suffer greatly... my (much younger) teacher wife says all this knowledge is stored in my brain, it's just miss-filed at this stage in life.

[joel hoffman]

Nevermind my foggy reference to PL 85-804. That refers to "requests for relief". I misread the reference to PL 85-804.

I don't know when the original requirement for certification of requests for equitable adjustment was codified. But it was obviously earlier than 1994, because FASA replaced the earlier clause at DFARS 233-7000. I just can't find the date and threw away my old.references to it.

[Guest Vern Edwards]

The requirement to certify REAs under DOD contracts originated with Section 813 of Public Law 95-485, the DOD Authorization Act of 1979. It applied to "any contract claim, request for equitable adjustment to contract terms, request for relief under Pub. Law 85-804, or other similar request exceeding $100,000." It was imposed at the instigation of Admiral Rickover. The certificate was required with the initial submission of the REA and was distinct from the certificate required by the Contract Disputes Act of 1978; however the language of the two certificates was very similar.

I don't understand the point of posting several paragraphs of speculative reminiscence.

Throw away the punch cards.

[Don Mansfield]

We're trying to definitize an unpriced contract modification with a government agency and submitted a definitization proposal as directed by the agency The agency asked for an REA certification to go with our definitization proposal. Our thought is that a definitization proposal directed by the CO is not an REA. Any thoughts, opinions, or citations on this?

Was the unpriced contract modification a "contract action" as that term is defined at DFARS 217.7401(a)? Not all unpriced contract modifications are "undefinitized contract actions."

(a) ?Contract action? means an action which results in a contract.

(1) It includes contract modifications for additional supplies or services.

(2) It includes task orders and delivery orders.

(3) It does not include change orders, administrative changes, funding modifications, or any other contract modifications that are within the scope and under the terms of the contract, e.g., engineering change proposals, value engineering change proposals, and over and above work requests as described in Subpart 217.77. For policy relating to definitization of change orders, see 243.204-70.