Jump to content
The Wifcon Forums and Blogs

Recommended Posts

Contractor has Cost-Reimbursable contract (contract #1) with government for services. It is not a task order contract. Contract #1 expiration date passes. Contractor continues to perform work (at risk) while new follow-on contract for exact same work (contract #2) is being negotiated. No prior indication of problems or discussions were provided (which we understand is not required), but a cure notice was issued under both contract #1 and contract #2, citing as grounds that delays in processing certain information (for which there were no due dates or schedule requirements) was ?endangering performance of the contract.? Cure Notice was issued 30 days after contract #1?s expiration date, and approx. 3 weeks prior to execution of contract #2 (which was ultimately back-dated to coincide with the expiration of contract #1).

Is there a providion in FAR that allows (or prohibits) the issuance of a cure notice under a contract that has expired and a contract that has not yet been awarded?

Share this post


Link to post
Share on other sites
Contractor has Cost-Reimbursable contract (contract #1) with government for services. It is not a task order contract. Contract #1 expiration date passes. Contractor continues to perform work (at risk) while new follow-on contract for exact same work (contract #2) is being negotiated. No prior indication of problems or discussions were provided (which we understand is not required), but a cure notice was issued under both contract #1 and contract #2, citing as grounds that delays in processing certain information (for which there were no due dates or schedule requirements) was ?endangering performance of the contract.? Cure Notice was issued 30 days after contract #1?s expiration date, and approx. 3 weeks prior to execution of contract #2 (which was ultimately back-dated to coincide with the expiration of contract #1).

Is there a providion in FAR that allows (or prohibits) the issuance of a cure notice under a contract that has expired and a contract that has not yet been awarded?

It's stupid to issue a cure notice after a contract has expired. Issuing one against a contract that has not been awarded is incredibly stupid. Any CO who does something like that should be stripped of their warrant.

Share this post


Link to post
Share on other sites

IMO, you should cut your losses and immediately procure new services. You do not have a contract but KTR may be entitled to compensation for services performed under implied contract, equity, estoppel theory etc. Also, what will you do if KTR ignores cure? Will you proceed with a termination? If so, what are you going to terminate? Perhaps, in the future, your agency should consider, adding/exercising options, procuring new services, or any other fall back plan.

Share this post


Link to post
Share on other sites
IMO, you should cut your losses and immediately procure new services. You do not have a contract but KTR may be entitled to compensation for services performed under implied contract, equity, estoppel theory etc. Also, what will you do if KTR ignores cure? Will you proceed with a termination? If so, what are you going to terminate? Perhaps, in the future, your agency should consider, adding/exercising options, procuring new services, or any other fall back plan.

Charles, I agree with both Vern and you, except you said: "You do not have a contract..."

IMO said that there is now a contract. "Cure Notice was issued 30 days after contract #1’s expiration date, and approx. 3 weeks prior to execution of contract #2 (which was ultimately back-dated to coincide with the expiration of contract #1).

The actions occurred during a 7 1/2 week period in between expiration of contract #1 and execution of contract #2, which now has an effective date of when the contractor just kept going with obvious government acknowledgment. Doesn't change the fact that the stupid things happened, but there appears to be a contract. It apparently covers the time frame that the contractor performed the work. I don't know the validity of the cure notice or if there was a proper ratification of the contract performance during that period.

Share this post


Link to post
Share on other sites
Charles, I agree with both Vern and you, except you said: "You do not have a contract..."

IMO said that there is now a contract. "Cure Notice was issued 30 days after contract #1?s expiration date, and approx. 3 weeks prior to execution of contract #2 (which was ultimately back-dated to coincide with the expiration of contract #1).

The actions occurred during a 7 1/2 week period in between expiration of contract #1 and execution of contract #2, which now has an effective date of when the contractor just kept going with obvious government acknowledgment. Doesn't change the fact that the stupid things happened, but there appears to be a contract. It apparently covers the time frame that the contractor performed the work. I don't know the validity of the cure notice or if there was a proper ratification of the contract performance during that period.

I dont even know if the contract is legal or if a ratification is needed...

Share this post


Link to post
Share on other sites
I dont even know if the contract is legal or if a ratification is needed...

Then why say that there is a contract? That's what you said, right? How can you have a contract if the "contract" is not legal or if a ratification is required? If you don't know that the "contract" is legal or whether a ratification is required, then you don't know that there is a contract.

A paradox, don't you think?

Share this post


Link to post
Share on other sites
Then why say that there is a contract? That's what you said, right? How can you have a contract if the "contract" is not legal or if a ratification is required? If you don't know that the "contract" is legal or whether a ratification is required, then you don't know that there is a contract.

A paradox, don't you think?

Yep. However, "apparently" the contractor was still performing and most likely getting paid at the time of the thread, which was sometime after the contract was backdated.

Share this post


Link to post
Share on other sites
Yep. However, "apparently" the contractor was still performing and most likely getting paid at the time of the thread, which was sometime after the contract was backdated.

Why do you say "most likely"? Unless you have been told something that the rest of us have not, you have no basis to express any likelihood. Sheer groundless speculation. sunflower said that the contractor continued to perform "at risk." Have I misunderstood you?

Share this post


Link to post
Share on other sites
Why do you say "most likely"? Unless you have been told something that the rest of us have not, you have no basis to express any likelihood. Sheer groundless speculation. sunflower said that the contractor continued to perform "at risk." Have I misunderstood you?

Okay - Charles, there was a contract awarded. It has been dated to cover the period in which the contractor continued to perform at risk. It may or may not be legal. Why did you say that "You do not have a contract"?

Vern, I agree with your statement:"It's stupid to issue a cure notice after a contract has expired. Issuing one against a contract that has not been awarded is incredibly stupid. Any CO who does something like that should be stripped of their warrant."

Share this post


Link to post
Share on other sites
There is no such thing as an illegal contract, unless you are Don Corleone.

Vern, I realize that you seem to be compelled to have the last word. However, I didn't ask you anything. I asked Charles a question and would appreciate it if you would let him answer me without adding snide.remarks. Thanks.

Share this post


Link to post
Share on other sites

I'm not answering your question. I'm pointing out an error that you keep making, probably because you are being careless with your words.

You said: "I dont even know if the contract is legal or if a ratification is needed."

Well, in our legal system an agreement cannot rise to the status of being a contract unless it is "legal."

You said it again when you asked Charles your question: "Charles, there was a contract awarded. It has been dated to cover the period in which the contractor continued to perform at risk. It may or may not be legal."

Again, if "it" is not "legal,' then "it" is not a contract.

Stop making that mistake and I'll stop commenting. Not long ago you took me to task for being ambiguous, pointing out that I might mislead the uninformed. You kept coming back for the last word until I surrendered. Remember? What's good for the gander is good for a goose.

Share this post


Link to post
Share on other sites
I'm not answering your question. I'm pointing out an error that you keep making, probably because you are being careless with your words.

You said: "I dont even know if the contract is legal or if a ratification is needed."

Well, in our legal system an agreement cannot rise to the status of being a contract unless it is "legal."

You said it again when you asked Charles your question: "Charles, there was a contract awarded. It has been dated to cover the period in which the contractor continued to perform at risk. It may or may not be legal."

Again, if "it" is not "legal,' then "it" is not a contract.

Stop making that mistake and I'll stop commenting. Not long ago you took me to task for being ambiguous, pointing out that I might mislead the uninformed. You kept coming back for the last word until I surrendered. Remember? What's good for the gander is good for a goose.

Thanks for the courtesy, Vern (NOT).

"Well, in our legal system", many "contracts" have been ruled null and void, due to various reasons. One that comes to mind is lack of legal capacity for one or more of the signatories. In my business law class of some 37 years ago , some examples were people who had been judged as mentally incompetent to manage their affairs and minors below the age of 18. Such "contracts" were usually not legally binding. According to the class, a minor could sign a contract to buy a motorcycle or bike, ride it then bring it back for a full refund. I remember the prof saying that if the minor broke or wrecked the bike, the merchant would still have to refund the sales price.

Here, a contract was signed and back dated to cover a period where the firm who is now the contractor was performing before the contract was executed During that period, the government issued a "cure notice" for unsatisfactory performance.

Contracts have been ruled to be null and void for various reasons such as lack of authority. That is why I said it may or may not be legal, if challenged. As of the day that IMO last posted and information provided, I would have to assume that the contract is still in place.

I don't know if it is legal to backdate a contract. The KO knew that the contractor was performing without a contract in place, according to the information provided. It appears to me (and I don't really care whether you agree) that the government intended to pay the contractor for the services rendered between the end of the first contract and execution of the follow-on contract, since the new contract period covers that performance. From the information provided, that would seem to me to be the reason that the KO back dated the contract. That isn't rocket science. Why would the contractor accept the date of the contract without being paid something for its performance?

As for the Cure Notice, the government had no contractual authority to issue it at the time. I doubt that back dating a contract to cover the time that a Cure Notice was issued would make the action "legal". But, I'm not a lawyer.

Now, I still would like Charles to please explain why he said that there is no contract. I think that he is an attorney and I'm interested in his opinion. Please allow him to respond. Thanks.

Share this post


Link to post
Share on other sites

Charles can respond whenever he likes, if he chooses to do so. I'm not stopping him. If you want to communicate with him without interruption you can send him a message through Wifcon. Just click on his name/avatar and then click "Send Message." Since you were obviously addressing me in your last post, I'm going to respond.

Whether or not it is legal to "backdate" a contract depends on what "backdate" means. There is nothing inherently illegal about signing a contract on December 1 and entering an effective date of October 1, so long as nothing prohibits. FAR 31.205-32 expressly permits the allowability of "precontract costs" to the extent that the parties agree. See also FAR 52.232-20, paragraph (f), and 52.232-22, paragraph (i).

Share this post


Link to post
Share on other sites
IMO, you should cut your losses and immediately procure new services. You do not have a contract but KTR may be entitled to compensation for services performed under implied contract, equity, estoppel theory etc. Also, what will you do if KTR ignores cure? Will you proceed with a termination? If so, what are you going to terminate? Perhaps, in the future, your agency should consider, adding/exercising options, procuring new services, or any other fall back plan.

Charles, there was a contract awarded. It has been dated to cover the period in which the contractor continued to perform at risk. Why do you say "You do not have a contract"?

Thanks.

Share this post


Link to post
Share on other sites

Joel,

From the original poster?s own admission a cure notice was issued for services received when no contractual instrument was in place. There are no additional facts from the OP?s statements to indicate whether the KO and KTR agreed to continue work without a written instrument with the intent to definitize it. There are no statements to indicate there was a meeting of the minds.

Perhaps, the agency considering a cure notice when no contractual instrument was in place is some evidence indicating there was no mutual assent. Also, your suggestion that this transaction may require ratification seems to infer you are questioning whether this was in fact a contract. If the KTR continued performance based on statements from someone who did not have the authority to enter into a binding agreement then the government would have to determine whether ratification is appropriate. If something requires ratification then it would be appear to be an unauthorized commitment, no contract.

So, I supposed to be more correct I could have stated ?IMO most likely than not there is no contract.? But, I thought the following statements on equity and implied contract theory would be sufficient to indicate a quasi contract may exist. And if more facts were available we could argue that there was an express contract as opposed to an implied one. Again my original statement was based on the OP presented facts not assumptions.

Best,

One more thing. I enjoy the discussion and appreciate your comments.

Share this post


Link to post
Share on other sites
Joel,

From the original poster?s own admission a cure notice was issued for services received when no contractual instrument was in place. There are no additional facts from the OP?s statements to indicate whether the KO and KTR agreed to continue work without a written instrument with the intent to definitize it. There are no statements to indicate there was a meeting of the minds.

Perhaps, the agency considering a cure notice when no contractual instrument was in place is some evidence indicating there was no mutual assent. Also, your suggestion that this transaction may require ratification seems to infer you are questioning whether this was in fact a contract. If the KTR continued performance based on statements from someone who did not have the authority to enter into a binding agreement then the government would have to determine whether ratification is appropriate. If something requires ratification then it would be appear to be an unauthorized commitment, no contract.

So, I supposed to be more correct I could have stated ?IMO most likely than not there is no contract.? But, I thought the following statements on equity and implied contract theory would be sufficient to indicate a quasi contract may exist. And if more facts were available we could argue that there was an express contract as opposed to an implied one. Again my original statement was based on the OP presented facts not assumptions.

Best,

One more thing. I enjoy the discussion and appreciate your comments.

Thanks for the information, Charles. I see your points.

Share this post


Link to post
Share on other sites
Guest
This topic is now closed to further replies.

×