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Adding Class Deviation to Existing Contract


erock

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Hello,

I have a Small Business set-aside contract that includes 52.219-14 (Jan 2017).  There is now a Class Deviation for this clause, 2020-O00008.  

If the contractor agrees, are there any issues with removing the Jan 2017 version of the clause and adding the deviation?  

The deviation provides more flexibility in subcontracting that would be beneficial to the Government.

Thanks.

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54 minutes ago, erock said:

If the contractor agrees

Key to the scenario you have posed. 

There could possibly be issues most specifcally the contractor requesting adjustment in contract price/cost but mutual agreement makes it easier.  Others might argue scope too since you might be changing value, performance, etc. but the details would dictate.  

 

 

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8 hours ago, erock said:

The deviation provides more flexibility in subcontracting that would be beneficial to the Government

I disagree.  I think the deviation makes life easier for the contractor, provides more flexibility for the contractor, and would be beneficial for the contractor.  After getting the legal opinion Vern mentioned, I don't think you should make any change unless the contractor agrees to significantly reduce the contract price or fee.  

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Just me, but agree disagree regarding price/cost.....it depends on the facts of the specific contract.   The change in approach regarding subcontractors could in fact be more costly.   Why?  I could make up stuff to demonstrate but the fact remains the contract could be modified if both parties agree.  Where such a modification leads the parties in discussion and negotiation who knows.

I do not disagree with discussion with legal counsel by either party as applying the deviation may in fact lead to all kinds of issue for the contractor as well.  Without details the first that comes to mind for me is questions of affiliation and then go from there any direction you want.

The best answer might be...... yes with mutual agreement of the parties the contract could be modified to replace the clause but after that it most likely is not as simple as it sounds.

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Just now, Vern Edwards said:

Has anyone compared the two versions of the clause, determined the differences, and analyzed the impact?

If not, why talk on? To do so is just to speculate.

erock, get a legal opinion.

Not me....and agree!  😀

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Thanks for the discussion.  
 

The contract is CPFF for non-performance based, level of effort, engineering services. Some of the requirements are only for 12-months, which the prime claims to be a deterrent to hiring people to fill those requirements.  

One option was to subcontract the shorter term requirements, but the prime is only at 50% cost incurred for employees, and cannot subcontract anymore of the labor due to the limitation in 52.219-14(c)(1).

I didn’t consider the impact this change would of had on the competition.  Thanks, I’ll get legal’s opinion, but I’m thinking this is not the answer to the problem.

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3 hours ago, erock said:

but the prime is only at 50% cost incurred for employees,

So at the expense of going beyond my last advice, agree to seek legal advice, I have quoted your statement to illustrate something.  That is here is the wording of the deviation clause...

"(1)  Services (except construction), it will not pay more than 50 percent of the amount paid by the Government for contract performance to subcontractors that are not similarly situated entities."

When you discuss with legal be prepared to talk the same language of the clause as compared to what you and contractor might consider.

Additionally if clarification of language still has changing the clause on the table I would inquire of legal if since the class deviation includes other clauses to be used in concert with the clause you propose to change do you have to change the others as well.

I hope you find a solution that works.

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erock, Make sure to Consider recording in CPARS that your contractor was unable to manage its subcontracting affairs according to the contract terms it agreed to accept.

Edited by ji20874
Change in tone.
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1 hour ago, ji20874 said:

erock, Make sure to record in CPARS that your contractor was unable to manage its subcontracting affairs according to the contract terms it agreed to accept.

WHOA! That is not good advice! The problems could be due largely or entirely to changes in government requirements or behavior or to market conditions---things beyond the contractor's control.

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