I have a question in regard to what constitutes "completion" in a CPFF Completion Type contract.  Specifically, when the Government does not bother to describe what it wants to complete for the contractor to earn Fixed Fee and instead uses very general terms like "Fixed Fee will be paid on an equally calculated quarterly basis, provided the contractor completes work approved by the COR in the workplan to the COR's satisfaction".

Here is a situation, the contractor is providing construction oversight services for an agency.  As a construction management oversight, the contractor is required to provide on site support, review RFI and REAs and submit quarterly reports to the ordering agency on the progress and issues with construction contractors.  The work-plans which are approved for each year of performance require the contractor to provide specialists on day to day basis doing oversight work and submit quarterly reports. 

The contractor has been performing under all the approved work plans, and submitting fixed fee invoices for every quarter which have been paid.    The contract ended after 2 years, however the construction that the contractor oversees is continuing due to the Excusable Delays extensions given to the construction contractors.

The oversight contractor feels they have earned full fixed fee, since they completed all the work per approved workplans, were never told to stop work or reduce performance and the contract period of performance ended.  The contractor did all that within the total estimated cost and in fact, for 20% less than the original estimated cost.

Now the Government wants to extend the services of the contractor to continue providing oversight of construction for the contractors who got executable delay extensions.

The contractor agrees to perform for another year but asks for a new Fixed Fee and additional cost in addition to the 20% remaining from the old period of performance.  

The Government argues that this is simply an "extension due to excusable delays" and so the contractor can only propose additional cost but no additional fee.

My interpretation is that the contractor does not have to accept the extension since this is not a pre-priced option and therefore can negotiate a new TEC and Fixed Fee for the new period of performance and the Government is issued to treat this as a new procurement under J&A.

Thoughts? Apart from: poorly written CPFF Completion scopes help no-one....

If I'm reading this correctly -- and I am not sure that I am -- then the contractor will accept a no-fee service extension IF the customer agrees that it has earned all previously negotiated fixed fee for the original scope? Is that correct?

3 minutes ago, here_2_help said:

If I'm reading this correctly -- and I am not sure that I am -- then the contractor will accept a no-fee service extension IF the customer agrees that it has earned all previously negotiated fixed fee for the original scope? Is that correct?

No.  The contractor is arguing that if the Government wants an extension, it will agree to perform but the government will need to add money for the estimated cost and give the contractor a new fixed fee for the extension period.   The government is arguing that the contractor did not earn full fixed fee for the original period of performance and so they will not pay an additional fee, because the construction the contractor was charged with overseeing was extended,  so additional oversight services are needed for an additional year.   There is nothing in the contract that requires the oversight contractor to only be paid if the construction contractors are on time.

27 minutes ago, Tzarina of Compliance said:

I have a question in regard to what constitutes "completion" in a CPFF Completion Type contract. 

What constitutes completion depends on the terms of the contract. What does the contract say? Did the SOW say that the contractor had to provide construction oversight until the construction was complete? Did it tie the period of performance to the status of the construction contracts? Or was the period of performance stated in terms of days or dates?

The oversight contractor did not experience delays, the construction contractors did, unless the oversight contract clearly tied the oversight contractor's  obligations to the status of the construction contracts.

If the oversight contract is not clear in that regard, then the answer is negotiable. If the issue cannot be settled by negotiation, then it may have to be settled by litigation.

 

1 hour ago, Tzarina of Compliance said:

Now the Government wants to extend the services of the contractor to continue providing oversight of construction for the contractors who got executable delay extensions.

How does the government intend on extending the contract, exercise an option, if so under what clause, change order, etc.?

1 hour ago, Retreadfed said:

How does the government intend on extending the contract, exercise an option, if so under what clause, change order, etc.?

They are saying that they are using an equitable adjustment to schedule under Excusable Delays, but then they are adding money to the Total Estimated cost for the extended period and I thought that excusable delays are non-compensable?.  Plus the excusable delays only apply if the contractor is delayed, and not as @Vern Edwardspoints out when the contractors that the contractor oversees are delayed.  So my view is that this is not an extension under Excusable delays, it is a sole source new procurement.  There is nothing in the contract that says that completion is tied to completion of construction, nor did the RFP ask for estimated cost and fee based on however long the construction may take.

@Tzarina of ComplianceIf the contract is cost-reimbursement, then it should include the clause at FAR 52.249-14, Excusable Delays. That clause does not provide for an "equitable adjustment" in time or money.

What you have described is the thinking and plan of an office that does not know what it is doing. You are likely correct in your thinking that the extension is a sole source procurement.

So what can you do, besides write a memo?

13 minutes ago, Vern Edwards said:

@Tzarina of ComplianceIf the contract is cost-reimbursement, then it should include the clause at FAR 52.249-14, Excusable Delays. That clause does not provide for an "equitable adjustment" in time or money.

What you have described is the thinking and plan of an office that does not know what it is doing. You are likely correct in your thinking that the extension is a sole source procurement.

So what can you do, besides write a memo?

This is a very good point ( of course).   I think what they are saying is that under paragraph (c) of FAR 52.249-14 they are extending the schedule due to the fact that the scope is not completed under excusable delays.  But (c) says the contractor has to request the extension and in this case the contractor did not.  The contractor in fact asserts that it has completed all the services that they have been required to complete under the scope and invoiced for all the fee due - i..e fee was to be paid for completing every quarter of the approved work plan to satisfaction of the COR.    COR provided satisfaction statement for each quarter.  

Thank you all as always.  Just wanted to make sure I am not missing something here.  Will write that memo.... 

FAR 52.249-14 (c) Upon request of the Contractor, the Contracting Officer shall ascertain the facts and extent of the failure. If the Contracting Officer determines that any failure to perform results from one or more of the causes above, the delivery schedule shall be revised, subject to the rights of the Government under the termination clause of this contract.

The oversight contractor was hired to oversee the performance of some construction contracts. The construction contracts were affected by some excusable delays. The oversight contractor was not affected by the delays.

A contracting officer worth their salt who was going to hire a contractor to oversee construction contracts would have included an option to extend the oversight in the case of just such an event, which is not at all uncommon in construction work. But to apply the excusable delay clause to the oversight contractor in an attempt to force them to continue to perform without additional fee is a howler.

Ignorance and incompetence reign supreme in that office. But if the contractor goes along without filing a claim for an adjustment to the estimated cost and fee of its contract, then it's just as dumb as the CO.

If I were the contractor and they pulled that nonsense on me I'd go right to a claim. Forget a request for equitable adjustment. The claim would be no more than two pages long.

Sigh.

1 minute ago, Vern Edwards said:

The oversight contractor was hired to oversee the performance of some construction contracts. The construction contracts were affected by some excusable delays. The oversight contractor was not affected by the delays.

A contracting officer worth their salt who was going to hire a contractor to oversee construction contracts would have included an option to extend the oversight in the case of just such an event, which is not at all uncommon in construction work. But to apply the excusable delay clause to the oversight contractor in an attempt to force them to continue to perform without additional fee is a howler.

Ignorance and incompetence reign supreme in that office. But if the contractor goes along without filing a claim for an adjustment to the estimated cost and fee of its contract, then it's just as dumb as the CO.

If I were the contractor and they pulled that nonsense on me I'd go right to a claim. Forget a request for equitable adjustment. The claim would be no more than two pages long.

Sigh.

❤️ - I am feeling this 🙂 

And the contractor should demand an increase in estimated cost, as well as fee, so they don't try to tag them with a cost overrun.

Tzarina, have you considered whether the construction oversight services are severable or non-severable?

Vern, Tzarina and the construction oversight contractor are all correct based upon the information provided. The contract didn’t tie completion of the services to actual construction completion period only to a named period, if I read Tzarina’s explanation correctly.

The oversight contractor didn’t delay construction completion or affect the constructor’s delayed completion date. Thus it appears to have performed the scope of its contract, within it’s contract period.

On 11/16/2021 at 11:39 PM, Vel said:

Tzarina, have you considered whether the construction oversight services are severable or non-severable?

@VelThat is an interesting question. How do you think the answer would affect the issue analysis, if at all?

Hi Vern.  It was this line in the original post that caught my attention: The contractor agrees to perform for another year but asks for a new Fixed Fee and additional cost in addition to the 20% remaining from the old period of performance.  

I think these services are severable based on the nature of the work and the quarterly reports.  Depending on the appropriation, it could be a problem to use the old appropriation for what we all pretty much agree is new work.

Yes, the funding source might change. Good point, Vel. The issue analysis itself  wouldn’t change though, which Vel pretty much agrees with. 

The contractor has apparently identified the estimated amount required to perform during the extended construction contract completion period as $20k plus (X), regardless of the funding source.

Of course it wouldn’t necessarily be aware of restrictions on the use of the remaining $20k. 

Which brings to mind another question. If the construction contractor is now performing after the contract completion date, who is overseeing the work? Just curious - don’t bother answering, Tzarina. 🤪

@VelThanks, Vel!

I ❤️ you people!!!

How did it work out Tzarina? 🤠

On 5/9/2022 at 6:37 PM, joel hoffman said:

How did it work out Tzarina? 🤠

Contractor prevailed and rightly so.    So we had to do a  J&A, new period of performance and new fixed fee as I thought we would.    You all rock!  I love this place. 

On 11/16/2021 at 12:22 PM, Tzarina of Compliance said:

So my view is that this is not an extension under Excusable delays, it is a sole source new procurement.  

Good example of the CO providing sound business advice.  Short, simple, to the point.