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Looking for a source re funding basics


gboyle

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I am trying to rebut an assertion that is so silly that I am struggling to respond without writing a treatise on how contracts work. I feel like I would have to start with the basics of letters, words, grammar. 

The assertion is that a contractor incurred some unanticipated costs on Contract 1 and that the USG reimbursed the contractor for that amount on Contract 2. The costs at issue only relate to Contract 1, so there is no overlap on the contract. Contracts 1 and 2 are sequential. Also, the costs were actually incurred, but no reimbursement from the USG occurred on either contract.

I need to prove the negative, and my objective is to explain that this is procedurally impossible citing the FAR or other sources. I know that a contract scope includes a defined POP and that the funding is tied to that POP, but I need an objective source to make this point. I cannot find anything that succinctly explains this, and I am hoping you great minds can point me in the right direction.

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1 hour ago, gboyle said:

I am trying to rebut an assertion that is so silly that I am struggling to respond without writing a treatise on how contracts work. I feel like I would have to start with the basics of letters, words, grammar. 

The assertion is that a contractor incurred some unanticipated costs on Contract 1 and that the USG reimbursed the contractor for that amount on Contract 2. The costs at issue only relate to Contract 1, so there is no overlap on the contract. Contracts 1 and 2 are sequential.

Does the person asserting this have the details? What type of contracts are they?  What do you mean by “sequential” contracts?   E.g., follow on contract with same or similar scope?  Different funding, like separate fiscal year funding? What type of mod, including funding and clause (e.g., Changes, Delays, , etc.)? Was it an out of scope supplemental agreement? Was it a Ratification of a prior obligation added for administrative purposes? 

”Contractor incurred additional costs” ??  What basis exists to “reimburse” the contractor?  Cost reimbursement contracts?

1 hour ago, gboyle said:

Also, the costs were actually incurred, but no reimbursement from the USG occurred on either contract.

So, you are familiar with both contracts and can’t find any mention of “reimbursement” on either contract?

Finally, what “argument “are you trying to rebut?  What “negative” do you need to “prove”?  There isn’t enough clarity and detail in your explanation to justify or “prove” the “assertion” (whatever that is)  or to “prove the negative”?

Adding an obligation to pay for anything outside the scope of the follow on contract would Generally, as a minimum,  require an outside the scope supplemental agreement with complete detail and justification. 

 

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45 minutes ago, Don Mansfield said:

Why do you have to prove a negative? The Government is claiming they reimbursed you under Contract 2. Ask for proof.

Ah, a possible scenario for the “assertion” and  “prov[ing] the negative“...If this is the case, I would agree with Don. But your explanation didn’t make any sense to me.

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Let me try to re-phrase what you wrote -- tell me if I am getting the facts right...

  1. You work for a prime contractor.
  2. You have two contracts, Contract 1 and Contract 2.
  3. Both of these are cost-reimbursement.
  4. You incurred certain direct costs under Contract 1.
  5. You vouchered for these costs under Contract 1.
  6. The Government refused to pay those costs under Contract 1, saying they were already paid under Contract 2.
  7. You disagree that these costs have been paid under Contract 2.

If this re-phrasing is correct, then follow Don's advice.  And consider filing a claim under Contract 1 for the unpaid amount. 

If this re-phrasing is incorrect, please help me understand the facts.

And please, help me understand the relevance of styling the costs as "unanticipated."

In any case, I recommend dropping your intention of writing a treatise on how contracts work.

 

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Sorry if my summary suggested that we have an interest in addressing or pursuing reimbursement. We are not pursuing reimbursement, do not intend to, and I mentioned that only as context.

I know this is goofy. These are not GC people I am dealing with, and I am trying to nip this thing in the bud before they take this much further. It is a third-party to the contract alleging that money was received, when it was not. I should not have to prove a negative, but that is the position I am in.

My hope was that I could respond that it is an impossibility to receive a payment (or even funding) on one contract for an issue that is entirely unrelated to that contract and instead relates only to another predecessor contract (this is why I mentioned that the two were sequential--contract 2 is the follow-on contract that began the day after contract 1's POP ended). 

It's like this:

Quote

 

Other party: "How do I know the USG didn't already pay you under a different contract?"

Me: "Because that's not how it works."

Other party: "Prove it, or I am going to waste a lot of your time."

Me: <not sure how to respond>

 

BTW, I haven't visited or posted here in a long time, and I just want to say how happy and thankful I am that you all are still here and actively posting!

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1 hour ago, gboyle said:

I am trying to rebut an assertion that is so silly that I am struggling to respond without writing a treatise on how contracts work.

It sounds to me that there is a contract between your firm and a  3rd party. If your firm owes the 3rd party $ per the contract terms between your firm and the 3rd party, then your firm owes the $ to the 3rd party. The contract between your firm and the 3rd party is not relevant to your firm's contract with the government with respect to whether your firm received payment from the government or not. If it is, please explain.

Edited by Neil Roberts
missing words
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1 hour ago, gboyle said:

It is a third-party to the contract alleging that money was received

I would respond to this with: "Prove it."

1 hour ago, gboyle said:

"How do I know the USG didn't already pay you under a different contract?"

I would respond to this with an explanation of how your company ensures that payments received are credited to the right contracts, how this system is periodically reviewed, and how there was no finding of crediting Contract 2 with a Contract 1 payment (assuming that's true).

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