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I just had an odd exchange with another KO over the last several days regarding modification authorities to use in block 13 of a SF30.

For new sole source work to an existing order, they correctly used FAR 16.505(b)(2)(i)(B) in their justification. 

I personally would assume that one of three authorities would be used in the mod; 52.212-4(c) Changes (which is in the base), 43.103(a) Mutual Agreement of the Parties, or 52.217-8 as the work was arguably an extension... that was not the debate though. 

Instead, in block 13 the KO used "41 U.S.C. 4106(c)(2) and FAR 16.505(b)(2)(i)(B)" which are sole source justifications; but I did not think them modification authorities.  

When I asked this question of my agency's legal counsel, both confirmed that the KO was correct in their use of 16.505(b)(2)(i)(B) as "Based on the fact that this modification was done through a J&A, the J&A authority (which allowed the CO to take the action) should be the modification authority."

This was surprising to me. Am I wrong to be surprised? Do others use 16.505(b)(2)(i)(B) as an authority for sole source modifications?

Thank you for your responses. 

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The topic of the proper entry in SF 30 block 13 has been discussed here several times. Please check the Wifcon Forum archive.

What is clear to me on the basis of experience is that COs can put anything in SF 30 block 13 that they can get reviewing authorities to agree to.

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If it is new work, beyond the scope of the existing order, It isn’t a “change”, pursuant to the commercial item Changes language in  52.212-4(c).

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9 hours ago, joel hoffman said:

If it is new work, beyond the scope of the existing order, It isn’t a “change”, pursuant to the commercial item Changes language in  52.212-4(c).

I am interested in your conclusion.   While FAR 52.243-1 for instance limits the authority of a CO with regard to scope, there is no mention of scope with regard to 52.212-4(c).   Rather is just requires changes to be by mutual written agreement.   As such could not 52.212-4(c) be used as an authority citation for both in-scope and out of scope changes? 

By posing this question I am not saying that the (c) paragraph would alleviate the requirement for other steps (JOFOC by example) for an out of scope modification but the (c) paragraph by its very language, if not tailored, seems to provide authority for any and all changes regardless of scope.

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12 hours ago, joel hoffman said:

If it is new work, beyond the scope of the existing order, It isn’t a “change”, pursuant to the commercial item Changes language in  52.212-4(c).

@joel hoffman52.212-4(c) says, "(c) Changes. Changes in the terms and conditions of this contract may be made only by written agreement of the parties."

"Change," as used in that clause, isn't defined by FAR, so we must resort to the ordinary dictionary definition. See FAR 1.108(a). 

I don't buy that adding new work to a contract is not a change.

What is the "authority" for adding new work to a contract? To me, it's mutual agreement. It's the agreement of the parties that allows the CO to add the new work to the contract. True, that authority must be exercised in accordance with FAR Part 6 and other requirements. But those are  "prerequisites" to the exercise of that authority, not the authority to do it, since, pursuant to the terms of the contract, it can be done only by, let's see, "mutual agreement."

And FAR 52.212-4(c) is not the authority. It doesn't authorize anything. It merely sets a condition precedent to a change. By the express terms of the clause, "mutual agreement" is what's needed to authorize the change.

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If you really think about it, there is a chain of authority to modify a contract, starting, perhaps, with the ultimate authority of an authorization or appropriations act down through several links of intermediate statutory and regulatory authority, and further down to the immediate authority of contract terms. SF 30 is not clear about what level of authority the CO should cite.

When I was a trainee, the senior contract specialists used to argue about this, and some said to cite the Constitution.

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Carl, this is in response to your question: “As such could not 52.212-4(c) be used as an authority citation for both in-scope and out of scope changes?”

Assuming that one is going to sole source a new requirement, as an approved exception to competition, you can either negotiate a new contract or add it to an existing contract for convenience

If you want to add the work to an existing contract because it is more convenient, you would bilaterally modify the existing contract.

The authorization to sole source via adding it to an existing contract is outside the existing contract.

Either way, it would have to be a bilateral action.

The government can’t just add anything new that it wants to an existing contract without some authorization, such as an exception to competition (if it isn’t within the scope of the original contract). The contractor has the choice to agree or not agree with adding the additional works 

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2 hours ago, joel hoffman said:

The government can’t just add anything new that it wants to an existing contract without some authorization, such as an exception to competition (if it isn’t within the scope of the original contract).

@joel hoffmanI know that your last post was addressed to Carl, but I'm going to respond to it. FAR 6.302-1 authorizes a contracting officer to conduct an acquisition without obtaining full and open competition by soliciting and negotiating with only one source. It does not authorize a CO to modify a contract. It makes no mention of modifying a contract. The authority sought in SF30 block 13 is the authority to modify the contract in question. In the case of a new work supplemental agreement or a change to a commercial items contract, the authority to modify the contract is obtained through mutual agreement of the parties.

FAR 52.212-4(c) does not authorize anything. It states a condition that must be met in order to change the contract. Again, the authority to change the contract is obtained through mutual agreement. Mutual agreement is the authority.

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I agree with the above that the modification needs to be bilateral; looking through the arguments I think everyone is agreeing with that. 

I would personally have elected to cite 43.103(a) Mutual Agreement on the SF30; although I certainly see merit in the argument that 52.212-4(c) could have been cited and wouldn't look twice at that during an audit or peer review as long as it was bilateral. 

I don't see any major push that the sole source justifications ARE a reasonable modification authority for the SF30; just that its probably in the category of something "reviewing authorities to agree to"; which puts in context to me that it was not wrong to feel surprised by the experience of running into a KO and legal team who argued 41 U.S.C. 4106(c)(2) and FAR 16.505(b)(2)(i)(B) as what should be used as authorities.

Thank you for your responses.

 

 

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Well a “supplemental agreement” in block 13 c  IS a bilateral agreement. In this case, it is added to an existing contract for convenience rather than issuing a separate, new contract.

The authority to contract with the sole source is the appropriate exception to competition. That’s all I’m saying.

That is what we traditionally cited for such out of scope supplemental agreements in block 13 c of the Standard Form 30.

It is redundant to say that this supplemental agreement is entered into pursuant to the authority of a “bilateral” or “mutual” agreement (“supplemental agreement”).

Block 13 c is simply a record of the source of the modification action for future or independent reference. It’s the “why”, not “how”.  Of course,  it is a mutual agreement or bilateral action here because it is a “supplemental agreement”. The “how” is already stated when you check block 13 c.

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7 hours ago, DeLong said:

I would personally have elected to cite 43.103(a) Mutual Agreement on the SF30;

“43.103   Types of contract modifications.

Contract modifications are of the following types:

(a) Bilateral. A bilateral modification (supplemental agreement) is a contract modification that is signed by the contractor and the contracting officer.”

This response to checked block 13 c says nothing at all. It merely says that a supplemental agreement is a (mutual) supplemental agreement….

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7 hours ago, DeLong said:

I would personally have elected to cite 43.103(a) Mutual Agreement on the SF30; although I certainly see merit in the argument that 52.212-4(c) could have been cited and wouldn't look twice at that during an audit or peer review as long as it was bilateral. 

Geez.

@DeLongFAR 43.103(a) is a definition, not a source of authority! Neither is 52.212-4(c). FAR 52.212-4(c) says that you need the authority of mutual agreement in order to mod a commercial items contract. It's the agreement that provides authority, not the need for agreement.

Just write "Mutual Agreement" into the space provided at Block 13c. Then the line would read: C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO AUTHORITY OF: Mutual Agreement.

If it makes you feel better, write: "Mutual Agreement, as required by clause 52.212-4(c)."

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This seems to be one of those discussions that could fall under the heading, How many angels can dance on the head of a pin?*  Certainly, there are some clearly wrong possible answers, and reviewers should correct those errors if they undermine the legality of the modification.  And if the action is specifically authorized by a contract clause, block 13 should say so.  Otherwise, maybe it is best to let it pass.

I know some people object to "Mutual Agreement" for a supplemental agreement, but I am okay with it.  To whatever degree it is a tautology, well, the SF-30 format forces that outcome.  However, I would object to "Mutual Agreement" if the mod's purpose, for example, was to raise the contract price because of the non-availability of promised government property -- there's a specific contract clause for that.

https://en.wikipedia.org/wiki/How_many_angels_can_dance_on_the_head_of_a_pin%3F

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2 hours ago, joel hoffman said:

It is redundant to say that this supplemental agreement is entered into pursuant to the authority of a “bilateral” or “mutual” agreement (“supplemental agreement”).

@joel hoffmanNo more so than saying that a change order is issued pursuant to the Changes clause.

 Generally, under the law of contracts a change to a contract requires the mutual agreement of the parties. But sometimes a specific provision in FAR authorizes a supplemental agreement and should be cited as the source of authority. See for example FAR 52.236-1, Performance of Work by the Contractor (APR 1984):

Quote

The Contractor shall perform on the site, and with its own organization, work equivalent to at least ____________ [insert the appropriate number in words followed by numerals in parentheses] percent of the total amount of work to be performed under the contract. This percentage may be reduced by a supplemental agreement to this contract if, during performing the work, the Contractor requests a reduction and the Contracting Officer determines that the reduction would be to the advantage of the Government. [Emphasis added.]

The "authority" sought is the authority to modify the contract. The authority for the supplemental agreement could be the Changes clause if the SA is for an equitable adjustment after a change order. It could be a FAR 49.109-4 for a no-cost termination settlement.

Quote

The TCO shall execute a no-cost settlement agreement (see 49.603-6 or 49.603-7, as applicable) if-

      (a) The contractor has not incurred costs for the terminated portion of the contract or

      (b) The contractor is willing to waive the costs incurred and

      (c) No amounts are due the Government under the contract.

And see FAR 49.603-6: "(a) This supplemental agreement [insert "modifies the contract to reflect a no-cost settlement agreement with respect to the Notice of Termination dated ____" or, if not previously terminated, "terminates the contract in its entirety"]."

But when no FAR rule specifically applies to an SA, as when the parties decide to do something at their own initiative and for their mutual benefit, as when adding new work to the contract, then the authority is simply "mutual agreement."

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44 minutes ago, ji20874 said:

However, I would object to "Mutual Agreement" if the mod's purpose, for example, was to raise the contract price because of the non-availability of promised government property -- there's a specific contract clause for that.

Exactly. SF30 block 13 asks the CO to link a mod to some source of authority. When a FAR rule is the basis for an SA, then the CO should cite the FAR rule. But certainly not FAR 43.103(a) or 52.212-4(c), which don't authorize anything.

But when the agreement is not entered into on the basis of any rule other than the common law of contracts, which says that parties that can make a contract can modify the contract, then "mutual agreement" is appropriate.

But this is an old issue that has not been resolved in over 50 years.

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Just now, Vern Edwards said:

But when no FAR rule specifically applies to an SA, as when the parties decide to do something at their own initiative and for their mutual benefit, as when adding new work to the contract, then the authority is simply "mutual agreement."

So I am not in disagreement so far (pardon the pun)....But in a dumb question... 

 

Just now, Vern Edwards said:

When a FAR rule is the basis for the agreement, then the CO should cite the FAR rule.

How do we get to this?   Would it not be "When a Contract rule (aka clause) is the basis then the CO would cite the clause"?   Honest question as I do wonder how the FAR and the gyrations it requires is pulled into a contract when the contract has no discussion of say what has to be done by a CO outside the contract such as a JOFOC etc. 

And then with a smile I just want to reference FAR 43.301 where now I am intrigued by what the FAR requires of a SF 30, look at (3) of this citation.  Add, in FAR 53.243 as well as the reverse of the SF-30 itself at (g).  

My addition to the head of the pin I guess.

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2 hours ago, joel hoffman said:

It is redundant to say that this supplemental agreement is entered into pursuant to the authority of a “bilateral” or “mutual” agreement (“supplemental agreement”).

@joel hoffmanRemember that while all SAs are consummated by mutual agreement, not all are authorized by mutual agreement.

COs cannot simple agree to give a contractor more time or money at its request after a change order They need the Changes clause to authorize them to agree to equitably adjust the cost or time required for performance, which is done by supplemental agreement.

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12 minutes ago, C Culham said:

How do we get to this?   Would it not be "When a Contract rule (aka clause) is the basis then the CO would cite the clause"?   Honest question as I do wonder how the FAR and the gyrations it requires is pulled into a contract when the contract has no discussion of say what has to be done by a CO outside the contract such as a JOFOC etc. 

I'm not sure what you are asking. Please clarify.

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14 minutes ago, C Culham said:

How do we get to this?   Would it not be "When a Contract rule (aka clause) is the basis then the CO would cite the clause"? 

Are you asking why the CO would cite anything other than a contract clause? In other words, why would the CO cite anything from the FAR that is not in the contract?

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Well, I think that SF30 block 13 is mainly for government use. I think it is documentation of the "authority" (basis) for the mod. I don't think its purpose is to provide an explanation or justification to the contractor, but for the record. As such, it relates the mod to some source.

Consider, for example, a no cost termination settlement agreement. I haven't checked this morning, but I do not recall any mention of no cost settlements in the termination for convenience clause, FAR 52.249-2. They're mentioned in FAR 49.109-4, but not in the clause itself. So I don't think the CO should cite the T for C clause in documenting the basis for the SA. Anyone reading the clause will find no mention of a no cost settlement agreement. So as a CO I would cite FAR 49.109-4, which expressly authorizes such agreements.

But if I were reviewing a no cost settlement agreement under SF30, and if the CO cited the T for C clause instead of 49.109-4, I would not make an issue of it. If the person bringing the mod to me for review were a trainee, I might sit them down and discuss the matter with them and explain the issues that have arisen over SF30 block 13c since time immemorial.

As a young GS-05 contract specialist, I listened to a group of very senior GS-12 contract specialists argue about SF30 block 13c in 1975. I can even name the people. Some of them are still alive.

Edited by Vern Edwards
To delete a typo error double use of "not" in the second paragraph..
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20 minutes ago, Vern Edwards said:

Well, I think

I will go with what you think....but I do wonder.  The SF 30 goes to the contractor in almost all cases but by experience there is a whole lot of paper attached to a mod in the COs file that never makes it to the contractors eyes.  Seems that paper would be the discussion of authority, reasoning etc. with "Mutual agreement" being the authority shown on the SF 30  for your example of no cost settlement and a whole lot more.

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For the original subject, there is nothing in the contract that provides the authority to add work that is out of the scope of the competed contract. The government and the contractor can’t add out of scope work to the contract unless the government can use an exception to competition. That exception provides the authority add the work via a modification. The method used is a supplemental agreement.

The alternative is to negotiate a new contract. The former is usually more convenient and quicker than creating a separate contract.

It doesn’t matter whether it’s a commercial item contract format or standard non-commercial contract format if an SF-30 is the mod instrument. You are simply documenting why you added the new, out of scope work.

Did it many times… cited the appropriate authority for an exception to full and open competition in block 13 c for a supplemental agreement.  Its not rocket science.

And yes, it is mainly for government use - for the record. 

 

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4 hours ago, joel hoffman said:

The government and the contractor can’t add out of scope work to the contract unless the government can use an exception to competition. That exception provides the authority add the work via a modification. [Emphasis added.]

@joel hoffmanI don't think so, based on the plain language of the FAR, because the CO still needs the contractor's okay.

The authority you refer to allows an agency to solicit and negotiate with only one source, without full and open competition, nothing more. It makes no mention of contract modification. I've pointed that out several times, and it can be verified by reading FAR 6.302-1. Moreover, if the contracting officer complies with FAR 6.302-1(d)(2) he or she might receive a competitive offer. You're right that it's not rocket science.

Quote

Did it many times…

So what? I wrote "mutual agreement" many times. What you or I did or did not do many times proves nothing except that we did or did not do it. But thanks for once again demonstrating that there is no universally acceptable solution to SF30 block 13c. This argument will go on forever.

Now go ahead and have the last word. 😊

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8 hours ago, Vern Edwards said:

@joel hoffmanI don't think so, based on the plain language of the FAR, because the CO still needs the contractor's okay.

By definition, a supplemental agreement (Block 13 c of the SF 30) is a bilateral agreement. That is the topic under discussion.

“43.103 Types of contract modifications.

Contract modifications are of the following types:

       (a)  Bilateral. A bilateral modification (supplemental agreement) is a contract modification that is signed by the contractor and the contracting officer. Bilateral modifications are used to-

            (1) Make negotiated equitable adjustments resulting from the issuance of a change order;

            (2) Definitize letter contracts; and

            (3) Reflect other agreements of the parties modifying the terms of contracts”.

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