I am ready to close out a firm fixed price contract that was incrementally funded for the five-year contract period. The contract was modified several times to add funds to the contract. Do these modifications that incrementally fund the contract change the firm fixed prices for the two contract line items? The contractor has billed higher prices based on these modifications.

In order to answer your question definitively, one would need to read the modifications adding funds to determine with certainty whether thay had any impact on the contract prices, but generally, incremental funding actions do not affect contract prices.

Did your FFP contract include a clause specifically authorizing incremental funding?

Did you comply with the clause?

If the answer to both questions is YES, then the mere fact of incremental funding should not be a basis for changing the firm-fixed-price.

If the answer to either question is NO, then you may be headed for a claim and you need to talk to your attorneys.

But a good first step might be to reject the invoice as not proper, because the invoice prices exceed the CLIN prices. This puts the the ball back into the contractor's court, so to speak, and the burden is on the contractor to make a case as to why you should pay more than the contract authorizes.

Thank you for your reply. Here is an example of a mod that I could tie to the contractor's higher prices, although I disagree the contractor was authorized to increase its prices.

The purpose of this modification is to add incremental funding to the contract.

a. This Modification AS040 is being exercised in accordance with FAR Clause 52.232-18 Availability of Funds and adds incremental funding in the amount of $248,751.11 exclusive of GSA fee. This amount is in accordance with the client's allotment funding schedule as stipulated in Modification AO035.

b. The Option Period 04 additional labor funding supports Option Period 04 CLIN 4001, as specified, in accordance with Task Order 9T8ZDAIS808.

c. The Option Period 04 amount is increased by $248,751.11 under MIPR2BGSAR4006 Amendment No. 002. The breakdown is as follows:

Option Period 04 CLIN 4001 Instructor Labor: $208,950.93

Option Period 04 CLIN 4002 Security Support: $34,825.16

Option Period 04 CLIN 4003 Travel: $4,975.02

Total Option Period 04 additional funded amount: $248,751.11

d. The Option Period 04 funding is increased hereby by $248,751.11 from $746,253.32 to an adjusted Option Period 04 amount of $995,004.43.

e. The total task order value of $12,563,346.81 remains the same.

f. The total contract price is increased hereby by $248,751.11 from $10,511,713.04 to an adjusted contract price of $10,760,464.15.

g. The period of performance is unchanged.

h. All other terms and conditions remain the same.

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I hope you find this helpful.

Thank you ji20874. DFAR Clause 252.232-7007 was incorporated into the RFP in full text, but the clause was not completed when the contract was awarded. Unfortunately, the contractor has been paid and I am trying to obtain reimbursement before I close out the contract. I have a meeting scheduled with a GSA attorney later today.

Item e. from your post #4 seems determinative that the prices were not changed, notwithstanding the ambiguous wording in item f, which, I assume, was meant to refer to the amount of funding, not the contract price. Did the contractor bill and get paid more than was funded? How could the paying office pay more than the funds available, and more than the contract price? There's a bigger problem if their system doesn't prevent that!

To clarify, Mod AS040 provided funding in the amount of $208,950.93 for CLIN 4001 (for one month). The FFP for this CLIN for one month was $193,255.76. The billed amount was approved because funds were authorized, even though the price was unchanged.

jlew, is the labor under CLIN 4001 covered by the SCA? If so, did the contractor seek a price adjustment under FAR 52.222-43 when the option containing CLIN 4001 was exercised?

The labor under CLIN 4001 (and all CLINs ending on "001") is not covered by the SCA, but the CLINs ending in "002" are covered by the SCA. However, at no time during the performance period did the contractor request a price adjustment based on changes in the applicable wage determination. Instead, the contractor claims to have increased the number of people performing work on both CLINs and then billed higher prices when the CO (at the time) added funding to the order via a modification. Even so, the monthly reports indicate inconsistencies between staffing levels and amounts billed.

Jlew, do you know why ~$208K was obligated to fund a CLIN priced at ~$193K? Is this ~$15K the overpayment you want to recover? If not, what is the basis for the contractor billing more than the contract price?

To wvanpup: The mod only provides the dollar amount. There was no documentation to support issuance of the mod. The contractor claims additional labor was provided so it should be entitled to bill a higher price.

To wvanpup: The mod only provides the dollar amount. There was no documentation to support issuance of the mod. The contractor claims additional labor was provided so it should be entitled to bill a higher price.

Amazing! Is anyone associated with this contract still working for the Government or still alive? I recommend that you find out why the Md was issued.

Just to make sure what we are talking about, by any chance could this be an indefinite delivery contract where the orders issued under the contract exceeded the estimated ceiling of the contract?

To Mr. Hoffman - The CO went to DOD for a promotion.

To Retreadfed - I am absolutely sure this is not an IDIQ contract. There is nothing in the solicitation that identifies it as an "indefinite delivery" contract, nor does the solicitation contain the required clauses. Even if it were a Firm Fixed Price ID contract, the prices should not change via a mod to add incremental funds, right?

So, she went to DOD for a promotion. I suggest that you call her and ask. We can't guess why the CLIN was raised any better than you can.

EDITED TO ADD: Quite frankly, it is a matter of incompetence not to document the file "to support the issuance of" any modification. Maybe the files are misplaced, hmmm.

To Mr. Hoffman-I believe it will only cause unnecessary grief to contact him and attempt to obtain an explanation. I have his official file. His memos associated with the modifications to incrementally fund the order simply restate the body of the modifications verbatim. The justification and price analysis for these modifications are nonexistent.

Thank you to all who responded. Your comments confirmed my thoughts on this order, particularly in regards to incremental funding and contract prices.

Happy holidays to all and best wishes for a safe and healthy new year.

To Mr. Hoffman-I believe it will only cause unnecessary grief to contact him and attempt to obtain an explanation. I have his official file. His memos associated with the modifications to incrementally fund the order simply restate the body of the modifications verbatim. The justification and price analysis for these modifications are nonexistent.

jlew, I guess that's how one gets promoted, eh? jlew, thanks and I also wish you a merry Christmas.

Joel, I am sure you are familiar with the management principle that you resolve personel problems by promoting him/her.

Well that is so enlightening. I just realized why I was promoted. They needed me out of the way. Thanks so much all

To Boof: Another bicyclist--hurray! I think it's your winning personality and hard work, if not your technical expertise, that contributed to your receiving a promotion (btw, congratulations!).