Recouping Funds under PBA Contract

[Doug0464]

I was recently assigned as the ACO for an FFP PBA Services contract (the first one I have ever dealt with).  Has anyone had experience with how to reduce payment or recoup funds already paid in the event of non-performance?

[ji20874]

To start, please refer to the inspection clause of your contract (maybe FAR 52.246-__, or maybe para. (a) of FAR 52.212-4).

[Vern Edwards]

20 hours ago, Doug0464 said:

I was recently assigned as the ACO for an FFP PBA Services contract (the first one I have ever dealt with).  Has anyone had experience with how to reduce payment or recoup funds already paid in the event of non-performance?

@Doug0464First, if the agency paid the contractor for the services, then you must presume that someone considered the services to have been acceptable in accordance with FAR Subpart 46.5 and FAR 52.246-4. I suspect that no one made any determination of acceptability as required by FAR Subpart 46.5. It just paid the invoice upon receipt. That means you have to undo or redo some things.

If the agency now believes that the services were actually unacceptable and wants to recover the payment that was made, or part of it, you must make a quality assurance finding of unacceptability and a determination to that effect and the amount of the price reduction pursuant to FAR 52.246-4(e). (I presume that reperformance is not an option.)

You must forward the quality assurance finding and determination of unacceptability to the contractor and demand return of the overpayment in accordance with FAR 32.603 and 32.604 and the rest of FAR Subpart 36.6. You could recover the amounts by withholding part of future payments, but don't do that without an okay from your attorney.

You, or someone, had better write a really, really good determination that the services were not acceptable, based on solid quality assurance findings.

The fact that the contract is supposedly performance-based doesn't affect the procedure, but it might affect the quality assurance procedure and determination that the service was unacceptable.

You say you are an ACO. I presume that means you have a certificate of appointment. FYI, what I just described is Contract Administration 101.

I see you are in Vancouver WA. If you work for BPA, then what I just wrote probably won't apply. Check with your managers.

[C Culham]

1 hour ago, Vern Edwards said:

The fact that the contract is supposedly performance-based doesn't affect the procedure, but it might affect the quality assurance procedure and determination that the service was unacceptable.

If I might add if the contract is a "Commercial Item Acquisition" and FAR 52.212-4 is in the contract this paragraph may have application to your situation...

" (i) Payment.-

 

(1) Items accepted. Payment shall be made for items accepted by the Government that have been delivered to the delivery destinations set forth in this contract.

           (2) Prompt payment. The Government will make payment in accordance with the Prompt Payment Act (31 U.S.C.3903) and prompt payment regulations at 5 CFR Part 1315.

           (3) Electronic Funds Transfer (EFT). If the Government makes payment by EFT, see 52.212-5(b) for the appropriate EFT clause.

           (4) Discount. In connection with any discount offered for early payment, time shall be computed from the date of the invoice. For the purpose of computing the discount earned, payment shall be considered to have been made on the date which appears on the payment check or the specified payment date if an electronic funds transfer payment is made.

           (5) Overpayments. If the Contractor becomes aware of a duplicate contract financing or invoice payment or that the Government has otherwise overpaid on a contract financing or invoice payment, the Contractor shall-

                (i) Remit the overpayment amount to the payment office cited in the contract along with a description of the overpayment including the-

                     (A) Circumstances of the overpayment (e.g., duplicate payment, erroneous payment, liquidation errors, date(s) of overpayment);

                     (B) Affected contract number and delivery order number, if applicable;

                     (C) Affected line item or subline item, if applicable; and

                     (D) Contractor point of contact.

                (ii) Provide a copy of the remittance and supporting documentation to the Contracting Officer."