I am trying to sort out the actual contractual obligations between a federal agency and a contractor under a messy contract.

About a decade ago, the parties signed an agreement containing the terms and conditions under which the contractor would provide certain concession services to the agency at locations around the US. The locations to be managed by the contractor were not determined at the time of the contract. Instead, the contract required the contractor to follow certain steps to take over concessions upon request of the agency. The contract leaves key details to be worked out on a location-by-location basis with local staff.The contract itself reads more like a schedule contract, an agreement to agree. 

Over time, the contractor did begin to manage concessions and worked with the staff at the local building level to get those operations up and running. I don't think the contracting officer was in the loop, beyond getting monthly reports of the concessions under management. Contractor remitted no payment to the contracting officer, all payments went to local facililties. 

So here are my questions: Are these concessions operations part of the national contract? There are no actual work orders or any contract documents of any sort at the local level. And there is absolutely nothing in the national contract about actual performance obligations tied to specific locations. I believe the parties intended to add the locations to the contract in some manner along the way, but this never actually happened. What is the status of these operations and what needs to be done to bring the situation into compliance with federal contract requirements?

Thank you for any insight! 

 

NenaLenz,  Is there any problem?  A claim?  A failure?  If the concessions contract did not involve an expenditure of appropriated funds, then the FAR does not apply.  If the concessions contractor has been making payments, and there is no dispute about the amount, maybe all is well.  I assume your agency has the right to accept payment to augment local facilities funds, rather than payments going to the Treasury, but this is not a contracting concern.

58 minutes ago, ji20874 said:

Is there any problem?  A claim?  A failure?  

I am working with the contractor. We are trying to figure out when we can assert a claim for equitable adjustment, which is triggered by a modification. It seems like the agency needs to take some kind of official contract action to bring the concessions under the scope of the master contract. When that happens, I think it would trigger contractor rights to adjustment. At this point, it seems like the concessions locations aren't part of the federal contract, yet.

Under schedule contracts, agencies place orders. They are official orders against the T&C's of the BPA. Here, we have what I would call a BPA, but no orders. 

My approach would be to file a claim alleging there was an “implied-in-fact contract” due to the parties’ conduct. I would reference the written contract and its terms and allege that the written contract terms were included in the implied in fact contract, and were intended to be included as indicated by the written contract terms that "details were to be worked out on a location-by-location basis with local staff" and that payments for work was made by the Government to the contractor for implied in fact contract work (explain details). I assume the written contract includes equitable adjustment language. I would give details about the relevant initial statement of work and the verbal changed work.     

16 hours ago, NenaLenz said:

Are these concessions operations part of the national contract?

To be able to answer this question you would have to indicate what agency you are talking about.   As already mentioned in a previous post concession agreements are not typically covered by the FAR.  You need to be more explicit about your situation before more help can be offered.

 

16 hours ago, NenaLenz said:

What is the status of these operations and what needs to be done to bring the situation into compliance with federal contract requirements?

Again who knows without more details and again federal contract requirements may not apply at all.

I would be very careful about any ideas to solving your problems offered until you clarify your post as taking the route for instance suggested by Neil Roberts may in fact complicate your situation even more.  By example take a look at Forest Service Manual (FSM) 2710 on the internet with regard to how one agency handles concessions.

 

3 hours ago, C Culham said:

"...federal contract requirements may not apply at all." 

 

 

LenaNenz' post stated that it is a federal agency contract. I am caught off guard, Culham, as to why federal common law of government contracts may not apply. I certainly agree with you that more facts and research regarding the applicable agency controlling regulations would be helpful and may in fact lead to better solutions. 

Thanks for the input so far. The agency is the United States Postal Service. 

 

@C Culham and @Neil Roberts

It's nice of you guys to want to help, but LenaNenz's post does not provide enough information to enable an answer.

21 hours ago, NenaLenz said:

About a decade ago, the parties signed an agreement containing the terms and conditions under which the contractor would provide certain concession services to the agency at locations around the US. The locations to be managed by the contractor were not determined at the time of the contract. Instead, the contract required the contractor to follow certain steps to take over concessions upon request of the agency. The contract leaves key details to be worked out on a location-by-location basis with local staff. The contract itself reads more like a schedule contract, an agreement to agree. 

Emphasis added. Was the "agreement" a contract? How does she know? Was it awarded pursuant to USPS contracting rules or was it a NAFI agreement? (Maybe all USPS contracts are NAFI agreements.) Were there offer, acceptance, mutual assent, consideration? She doesn't say. Maybe it was only what she called it--"an agreement." Maybe calling it a contract is wishful thinking.

21 hours ago, NenaLenz said:

Over time, the contractor did begin to manage concessions and worked with the staff at the local building level to get those operations up and running. I don't think the contracting officer was in the loop, beyond getting monthly reports of the concessions under management. Contractor remitted no payment to the contracting officer, all payments went to local facililties.

She doesn't think the contracting officer was in the loop? Was she or wasn't she? 

21 hours ago, NenaLenz said:

So here are my questions: Are these concessions operations part of the national contract? There are no actual work orders or any contract documents of any sort at the local level. And there is absolutely nothing in the national contract about actual performance obligations tied to specific locations. I believe the parties intended to add the locations to the contract in some manner along the way, but this never actually happened. What is the status of these operations and what needs to be done to bring the situation into compliance with federal contract requirements?

Three questions and three responses:

Q. Are these concessions operations part of the national contract?

R. If there is a contract, what does it say about the concession operations? If it says nothing, how are we to know the answer to the question?

Q. What is the status of these operations [?]

R. What do you mean by status? What kind of status?

Q. What needs to be done to bring the situation into compliance with federal contract requirements?

R. What situation? What federal contracting requirements? The USPS is not governed by the FAR.

Have you discussed any of this with anyone in authority at the USPS? If not, why not?

Have you sought legal advice? If not, why not?

 

1 minute ago, Vern Edwards said:

Q. Are these concessions operations part of the national contract?

R. What "national contract"? This is first mention of a national contract. If there is a contract, what does it say about this? If it says nothing, how are we to know the answer to the question?

The agreement between the parties is a contract that was awarded through a competitive procurement process. It is characterized as a FFP contract, and indicates that the contractor will operate concessions and remit a certain operating fee and commission rate to the government. The contract includes a slew of USPS terms and conditions from this list https://about.usps.com/manuals/spp/html/spp10.htm. Incorporated clauses include, e.g., changes, pricing of adjustments and option to extend. 

6 minutes ago, Vern Edwards said:

Q. What is the status of these operations [?]

R. What do you mean by status? What kind of status?

I am trying to figure out if the concessions currently being managed by the contractor are actually covered by the national contract. It seems to me that to be covered by the national contract, the USPS would actually need to take some additional action related to each location. I am thinking of the way in which a Schedule contract works, where orders are placed under it. Here, the national office directed the contractor to take over the locations and then all subsequent negotiations and communications proceeded at the local level. 

The contract outlines a process through which the contractor would take different concessions under management. None of the clauses or other terms specifically address the manner in which contract would be supplemented or amended to include work orders for specific concessions. 

9 minutes ago, Vern Edwards said:

Q. What needs to be done to bring the situation into compliance with federal contract requirements?

R. What situation? What federal contracting requirements? The USPS is not governed by the FAR.

This is my key question - does USPS need to take a formal action to add the individual concessions locations to the national contract? Is there an argument that they were never made part of the national contract, and therefore they are actually agreements with each local PO? 

Happy to provide additional details upon request. 

Thanks again, all.

 

 

 

 

16 minutes ago, Vern Edwards said:

Were there offer, acceptance, mutual assent, consideration? She doesn't say. Maybe it was only what she called it--"an agreement." Maybe calling it a contract is wishful thinking.

I would say the answers to these questions would be the same as the answers to a GSA Schedule award. It is just agreement to agree, right? An agreement to terms, but it doesn't create any obligations unless and until an order is placed under those terms. Right?

NenaLenz,

A GSA schedule contract is not "just an agreement to agree."  A GSA schedule contract is a contract, under which orders are issued -- but the parent schedule contract itself is a contract.  For FAR coverage on agreements, see FAR Subpart 16.7.  But remember, your arrangement is not covered by the FAR, for two reasons: first, the FAR doesn't cover USPS; and second, the FAR doesn't cover concession contracts.

1 hour ago, NenaLenz said:

This is my key question - does USPS need to take a formal action to add the individual concessions locations to the national contract?

No one here has read your national contract, so we can't definitively answer your question.  I can't tell that the USPS has a problem -- your company is working and sending money to USPS, so maybe USPS is happy?  If so, there may be no need for USPS to take any action.  It seems your company has a problem (your company wants to "assert a claim for equitable adjustment"), so if anything needs to be done, it seems your company needs to do it.  

As an aside, the applicability of the Contract Disputes Act to concession contracts is unsettled law.  In some cases, judicial tribunals have said yes, based on the individual facts of the individual cases -- but these cases seem to be the exception to the general rule that concession contracts are not covered by the CDA.  Thus, if you do intend to file a claim, you might have to find an authority other than the CDA.

I'm wondering, is your arrangement covered by USPS Handbook EL-602, Food Service Operations?  If yes, as a commercial contractor or under the Randolph-Sheppard Act?

1 hour ago, NenaLenz said:

This is my key question - does USPS need to take a formal action to add the individual concessions locations to the national contract? Is there an argument that they were never made part of the national contract, and therefore they are actually agreements with each local PO? 

The only advice I can offer is that you locate the CO who is responsible for the national contract and put your questions to him or her. I can't speak for the others, but I do not know the answer to your question.

Thanks for all the input. 

23 hours ago, ji20874 said:

I'm wondering, is your arrangement covered by USPS Handbook EL-602, Food Service Operations?  If yes, as a commercial contractor or under the Randolph-Sheppard Act?

Yes, the contractor is a commercial contractor. The contract is subject to the EL-602 handbook.