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My organization has a single award BPA to perform software development for a particular agency.  Within this BPA, it states that GFE will be issued and used.  However, the program team states the delays on GFE are upwards of 8 weeks and upon receipt, are essentially useless, and the Government is expecting the team to perform Day 1.  Of course, they want to execute to the best of their ability but are demanding our corporate office to supply them laptops (CFE) to do the work.  While I plan to have a discussion with the CO and raise concerns that these are Government delays outside of our control and essentially state we can work around this, but it would require a contract mod to authorize CFE, which I feel we should price (we're looking at 100k extra in equipment that was not originally priced), my question is:

What potential risks are we looking at by developing on our equipment vs GFE?  I'd really appreciate some insight into this as I would like to ask the right questions and raise the right concerns.  I'm not overly technical is this particular area and any help would be appreciated.

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The Government Property clause (FAR 52.245-1) allows the contracting officer to unilaterally decrease the amount of government-furnished property provided to the contractor and allows for a corresponding equitable adjustment to the contract. It also provides for an equitable adjustment if GFP is delivered late or is unsuitable for use.

If the contract contains the basic version of the clause, the Government generally assumes the risk of loss of Government property.

If you use your own company's equipment, then your company assumes the risks of loss, unsuitability of equipment, and late delivery of the equipment to the users.

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What Don says. 

But I will add a little more.

You are dealing with a Government property situation.  Your contract probably includes the clause at FAR 52.245-1, Government Property.  Have you read the clause?  Para. (d)(2)(i) and (3)(i)(A) and (ii) may apply. 

You probably don't need a modification to allow for what you style as CFE -- you just need to pay attention to para. (d)(2)(i) and (d)(3)(i)(A) and (d)(3)(ii) of the clause at FAR 52.245-1 -- the modification will come later as part of the equitable adjustment.

The day after the Government fails to meet the promised date for delivery of the Government property (or sooner if you can project sooner), you should ask the contracting officer for instructions.  What does the contracting officer say?

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4 hours ago, CHILINVLN said:

What potential risks are we looking at by developing on our equipment vs GFE?  I'd really appreciate some insight into this as I would like to ask the right questions and raise the right concerns.  I'm not overly technical is this particular area and any help would be appreciated.

My vantage point and experience is from the contractor side. The right concerns and risks are highly dependent upon technical knowledge of the written statement of work and specifications included in the BPA Call document and how development is affected by substitution hardware. Risk of agreeing to substitute your company equipment for GFE without knowing that software development can still be successful on this substitute equipment may include the government eventually defaulting your company, being sued by the government, may result in a poor performance rating that negatively impacts receiving further government contracts, and there may be some software development rights that are different than in the current BPA/Call. I would request the equitable adjustment (schedule and $) for the delay in GFE and perform all work that could be performed without the GFE.

Risk avoidance would include advising the customer that furnishing Contractor computers should be a separate BPA and Call (if there even is such a BPA) that has nothing to do with the current BPA/Call for software development. I don't really know if the Government may need such computers if no development would take place on them. 

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I don't think my message was clear.  We are not purchased equipment on behalf of the Government, our Development team is being provided equipment from the Government that is lackluster in nature and the Government admits they have equipment issues and expect us to perform regardless.  The program manager wants our corporate office to provide everyone on the team high end laptops to use, offline from the agency, to develop software to meet the objectives of the SOW demonstrating that we are willing to go above and beyond to get the job done.  Issue is, the contract itself currently does not state this is authorized, only references GFE will be issued, but I'm wondering on if we can potentially recoop this cost we will incur as well as what other associated risk we have with this approach.

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39 minutes ago, CHILINVLN said:

Our Development team is being provided equipment from the Government that is lackluster in nature and the Government admits they have equipment issues and expect us to perform regardless.  The program manager wants our corporate office to provide everyone on the team high end laptops to use, offline from the agency, to develop software to meet the objectives of the SOW demonstrating that we are willing to go above and beyond to get the job done.  Issue is, the contract itself currently does not state this is authorized, only references GFE will be issued, but I'm wondering on if we can potentially recoop this cost we will incur as well as what other associated risk we have with this approach.

General capital type equipment like laptops do not seen specialized enough for any recoupment of costs. If it was something like a supercomputer like Cray, maybe that would be different, and should have been proposed. I would not change what I said about risks and are even more concerned since you plan on executing work with GFE known to you to be lackluster in nature.

Edited by Neil Roberts
sent before complete
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20 hours ago, CHILINVLN said:

What potential risks are we looking at by developing on our equipment vs GFE?  I'd really appreciate some insight into this as I would like to ask the right questions and raise the right concerns.

This is actually covered by one of the little known contractor commandments.

Thou shalt get permission in writing from the Contracting Officer, not the COR or a PM or anyone else, when deviating from the contract.

 

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8 hours ago, CHILINVLN said:

I'm wondering on if we can potentially recoop this cost we will incur as well as what other associated risk we have with this approach.

That depends wholly on you.  Did you read the paragraphs I cited from the Government Property clause?  Whether or not you negotiate for an equitable adjustment that recoups your costs and covers associated risks is wholly up to you.  Right?

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The major risks that come to my mind are more IT than contracting in nature.

Will your computers even work? If you project needs access to a GVT network or IT resource, I would double check whether CFE computer can get that access.  In my org, no CFE laptops allowed.  

The same concern for data.  Do you need GVT-provided data? (Avoid hearing this: "you want us to export to you our database of confidential reports full of PII so you can test with real data?  lol, no.")  Check with CO first. 

Software costs.  If you intend to purchase any type of software, this is a separate cost element than the hardware. Check with CO first.  IT departments frown upon contractors purchasing, and then invoicing for, software already in the GVT inventory.   Or buying Tesla-grade software, when Hyundai-grade suffices.   Also, if software is non-trivial in cost and/or valuable for whatever reason, who owns and takes possession of the stuff at end of contract?  As CO, if I am paying for the software (or hardware), the GVT will own it outright.

 

 

 

   

Edited by General.Zhukov
I can't type good English
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On 2/25/2021 at 12:45 PM, CHILINVLN said:

What potential risks are we looking at by developing on our equipment vs GFE? 

It might violate some cybersecurity provision in the statement of work or a cybersecurity clause elsewhere in the contract. If it does, your company could be in real trouble. It might also violate some data or software rights clause. Get authorization in writing from the CO before doing that.

6 hours ago, CHILINVLN said:

The program manager wants our corporate office to provide everyone on the team high end laptops to use, offline from the agency, to develop software to meet the objectives of the SOW demonstrating that we are willing to go above and beyond to get the job done.  Issue is, the contract itself currently does not state this is authorized, only references GFE will be issued, but I'm wondering on if we can potentially recoop this cost we will incur as well as what other associated risk we have with this approach.

There is no way that anyone at Wifcon Forum can answer that indirect question. And based on your posts, I would say that while ji20874 has given you good advice, I don't think that you will be able to figure much out by reading the government property clause. So ask the CO, in writing, whether the government would compensate your company. Tell him or her how much money you're asking about.

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I would recommend that CHILINVLN consider reading this recent decision at the Federal Circuit. It involves a failure to provide GFP (rather than a delay in providing GFP) but it discusses the CO's role.

Quote

... the complaint alleges that the Navy’s decision to withdraw the exhaust collector and engine mounts constituted a constructive change of the GFE provision for which BGT is entitled to an equitable adjustment. Although the contracting officer did not issue a signed order withdrawing those items of GFE, the complaint alleges that the contracting officer ratified the Navy’s decision to withdraw those items by real-locating them as fleet assets, thus providing the requisite authority for a constructive change.

Hope this helps.

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