joel hoffman

Geez. So does that mean the contract isn't terminated until the contractor signs and returns the mod? ??? Was there a notice of termination and what is the effective date on the SF30? I might add that it is sometimes difficult to find the contractor if they abandon the contract ("walk away from it"). I personally know of at least two interesting situations. One, where a government employee had to stake out a small contractor's home and serve him the termination, because he refused to pick up the certified mail. Another time, the KO actually served the contractor the termination through the open window of the contractor's pickup truck as he tried to run over the KO! Again, he wouldnt or couldn't receive the certified mailed TFD. Don't screw around with Terminations. Make it a unilateral instrument and make sure that the contractor actually receives it.

I'm curious what others think but no, I would still use unit prices. With sole source, I assume that you'd negotiate the unit price. Hope that somebody has an idea of the amount of effort necessary to service those instruments.

I am assuming that you are using some type of GSA Schedule, due to the thread you posted under. You don't know how many, but you know the minimum and maximum number per year. You also know the scope of services and know that the scope is the same for each instrument, so the scope of the service requirement is fixed. Why not use a unit-price contract arrangement (cost per instrument) and set up a BPA with one or more firms for repetitive needs? T&M or labor hour pricing arrangement wouldn't be appropriate when the scope of services for each unit is known and is essentially fixed.

Well, I guess 2stars figured this out on his/her own or else it wasn't a pressing problem.

Sue, I think Leo was trying to tell you that this topic area is intended for Contracting employment type questions, not contractor employee questions.

ANSWER: (My answers are based upon my experiences over 38 years with the Federal Government in DoD and 4 years in local and commercial contracting.) As I said earlier, our agency requires an admin mod to align the actual quantities with the estimated quantities at contract closeout. However, we don't have to issue a mod to pay for overruns (or underruns) during on-going construction as long as the overrun wouldn't cause the overall contract amount to be exceeded Iin other words, there should be some underruns in other bid items to off-set the overrun(s)). The answer to your question ultimately depends upon your agency's rules. In your case, if you have already made final payment, you need to ask if a reconciliation mod is necessary to balance the books. In theory, assuming that all line items using the same accounting classification or appropriation, you can make progress payments as long as underruns and overruns balance, so as not to cause the possibility of exceeding the available funding. In theory, you could also be sloppy and pay for overruns up to the contract price, but if additional funds aren't available to add to the contract when you need them, you may find yourself in an Anti-Deficiency Act violation. That's one reason that our agency requires us to reconcile the quantities and funding prior to final payment. Dont be sloppy in your contract administration. Theoretically, one can adjust quantities and add funding unilaterally with an admin mod, as long as the adjustment remains within the originally estimated quantity plus whatever range that any Variation in Estimated Quantity type clause cites, because it isn't affecting the rights of either party. So, assuming that the FAR Clause 52.211-18, Variation in Estimated Quantity is in the contract, one could theoretically issue an admin mod that increases or decreases the estimated quantity of an item by up to 15%. We include a statement that explains that the rights of the parties under the VEQ clause are not affected. If we dont know the final quantities yet, we also include a statement that the VEQ clause is based upon the originally estimated quantities. We are also assuming here that the variation is NOT due to any differing site condition, "Change" or any other change in the original scope of work. Having said that, the DoD computerized contracting system doesn't allow us to change the contract price via an Admin mod, so we must cite some clause to revise the price. Our Headquarters directed us to cite the VEQ clause in order to allow the program to change the price. That is really Hogwash, because the VEQ clause doesn't mention simple quantity adjustments - It is there to allow either party to seek a price adjustment under certain conditions, where actual quantities of work are outside the range and the overrun or underrun causes a change in the unit cost to the contractor to perform the work. ANSWER 2: The VEQ clause at FAR 52.211-18 does not cover revisions to estimated quantities. It is there to allow an equitable adjustment in the event that actual quantities vary from the estimated quantities plus the identified bandwith either side. If there is no VEQ clause in the contract, I'd say that the parties have agreed to pay for the actual quantities performed at the agreed unit price. There is no mechanism for either party to request a unit price adjustment or other line item price adjustment for overruns or underruns. This assumes that the variation in quantities isn't caused or covered by some other event or clause or isn't the result of a gross estimating error. For an underrun, theoretically, you are covered, unless your agency requires a reconciliation mod to match the final copntract cost to final progress in order to balance the books. ANSWER: see my answers above. ANSWER: See above. I'd say no mod is necessary for progress payments because you have enough funding in the underrun of line item D.6 to cover the overrun in item D.5, but your agency may require a reconciliation mod at some point. NOTE: All of the above answers assume that this is a Federal Contract, subject to the Federal Acquisition Regulations, not a state, local or private contract. It is a usually good idea to try to keep the quantities up to date on a fixed price contract in order to aid in contract administration and to aid overall management of progress vs. the theoretical 100% completion. If quantities are running all over the place in comparison with the estimates, you might not be able to keep up with actual progress. So, even though a mod might not be necessary for progress payment purposes, it behooves the contract administration office to keep up with the real requirements and with the contractor's progress against requirements.

As a correction to thye above, I remember that the Army SPS system didn't allow us to change the contract price using an Admin Mod. Anothyer tail wagging the dog problem with SPS. They instructed us to cite the VEQ clause in the Mod, even though that clause has nothing to do with administrative quantity adjustments when there is no entitlement to a "price adjustment.". The VEQ clause covers equitable adjustments for work outside the agreed quantity range of 85-115%, not simple quantity adjustments. So, in my opinion, one could do the mod unilaterally when no VEQ equitable adjustment is applicable. Administratively, that is really simple, even in the dreaded SPS.

I will be glad to help you but don't have time tonight, especially on the Blackberry. Will check on the computer tomorrow. The Corps of Engineers came out with a policy about 15 years.ago to adjust final quantities to actuals due to the data processing systems needs to match 100% final payments with with the contract price. If memory serves me, we did it as an admin mod for anything not requiring a VEQ adjustment, but we could also wrap it up in the same mod as the VEQ adjustments, when applicable.

Is this a construction contract? If so, did the prime bill you for the work of the subs? There are contractual differences between a prime not not paying subs if the contractor doesn't invoice the government for their work vs. the government making progress payments for work that includes the subs' work. Next question, are you with DoD?

Eleven, What does your job description say your duties are? If your job description includes being a KO, then you are performing your assigned duties. Maybe everyone else is working below their pay grade as described in their job description.

Carl, I didn't say that. Besides, the past performance ratings are only used for certain time periods, which vary according to the contract type (service or supply, construction, etc.). Carl, Seeker's second of four (Seeker asked FOUR, not "two" - questions) asked "If a contractor would come out better by breaching the contract and then making the Government whole by paying damages, would it be wrong for the contractor to deliberately walk away from the contract? " I suggested that it would be much better not to "walk away from the contract" but to help find someone to take it over or to subcontract it in order to minimize the impacts to both Seeker and the Government. Seeker rejected that scenario, as they know what they are going to do and know their business better than us (obviously). If Seeker "walks away from the contract", we would have to figure out how to get the service performed or the product that Seeker contracted to provide. We would have to terminate for default, reprocure, then go back to Seeker for reimbursement of delay costs, our labor costs, the excess costs to finish the contract, if any, etc. It is sometimes very difficult and usually time consuming to reimburse the various cost accounts or appropriations that the various government impact costs are charged to. It is technically "wrong" to breach a contract. I'm not inclined to rate a firm neutrally or favorably, if they "walk away from a contract", leaving us to incur the above outlined efforts, delays, impact time/costs. The firm apparently created its own problem, then decides not to help minimize the time and cost impacts to the buyer. The performance rating is used by contracting offices looking for firms willing and hopefully capable of performing related work during the next several years. Carl, Seeker's fourth question asked "Should the Government recognize deliberate breach to be a reasonable course of conduct in some circumstances?" While I agree that there can be factors that have to be weighed in order to decide whether or not to breach one's contract responsibilities, the firm can certainly help everyone by cooperating in getting the job finished and we might well reflect that in the performance rating accompanying comments. I've been involved in several TFD's, the reprocurements and the settlements. The defaulting firm and/or bonding company has either made things easier or tougher on both us and them.

Of course, I am somewhat thick. However, if Seeker's firm "walked away" from one of my contracts, we would have to reprocure and endure the delay of reprocuring whatever Seeker had promised to perform or provide. Then we'd have to go to the extra trouble, expense and effort of having to obtain reimbursement and to apply those funds to the proper accounts to cover my added costs (difficult), my customer's delay costs (very difficult) and the additional procurement costs, (less difficult but labor intensive). Why would I want to rate Seeker's performance as though I'd be interested in hiring him again? Why would I want to rate the firm's performance in a manner that could be used as a recommendation to other government contracting officials to hire Seeker's firm?

nevermind

___________________ Obviously you know your business and the customer better than I or we do . You asked us "What if completing the contract would cause the contractor to take a loss so great as to require it to fire workers, but the excess cost of reprocurement and other damages to the Government would be slight and significantly less than the cost of finishing the job?" You are correct in saying that you weren't clear. I don't understand what you mean by "...but the excess cost of reprocurement and other damages to the Government would be slight and significantly less than the cost of finishing the job?" Do you mean that you won't be responsible for the excess cost, if any over what you'd get paid, for somebody else to finish the job? I believe that assumption would probably be incorrect. Or, perhaps it would be cheaper for someone else to finish the job? That assumption invites a question from me. If it wont cost much if anything, why not get someone else to finish the job for you, then and avoid the termination or other consequences? You have to decide what is most important to you. If the latter assumption above is correct, perhaps it wouldn't be wrong to just walk and let them bill you, if someone can finish the job for minimal extra cost. But it would be darned dumb in my opinion, when you could probably mitigate your monetary and reputation loss and still save your employees' jobs by finding somebody to finish the job cheaper than you could and working out a solution with the government. But - you know what you want to do and you're doing it. Glad you learned something and good luck to you!

Refer to FAR 49.4 when the Contractor anticipates breaching the contract ("walking away"). The Government has the right to terminate the contract for default (see 49.402-1) in such a situation and probably will if the Contractor just decides to walk away, leaving the Government to find a way to get the contract completed. However, the Contracting Officer may also consider other courses of action in lieu of terminating for default, which is what I was discussing as a possible alternative. See 49.402-4 for example procedures in lieu of TFD. If the Contractor knows it is going to be responsible for excess costs to reprocure and complete the work, it might be in its best interests to find someone or to help find someone to finish the job, whether as a replacement or as a subcontractor. That speeds up the process, which may very well reduce the re-procurement and/or impact costs. I'd advise a contractor to discuss its predicament and find better alternative than just walking off, facing a TFD, leaving the government to re-procure, then ZAP the guy.

In my opinion, in contrast to some others, I think it would be beneficial to discuss your problem with the KO and offer to help mitigate the effort, time and cost to arrange for someone else to complete the contract, as opposed to just walking off and saying goodbye, get somebody else to do this and send me the bill. Contrary to some peoples's opinion, there are actually some competent and reasonable contracting officers and support staff out there. Win-win or least mitigating the hassle and impacts for both parties surely beats lose-lose.

How about another alternative similar to one that we used in Saudi Arabia in the early 1980's. Contractor was failing and losing money on a large construction contract. It was more convenient for us and better for the contractor to not default and for us to have to start over on the reprocurement. So, we allowed the contractor to subcontract completion of the project to another firm. The firm came in, took over the project and finished it, although the failing firm was still offcially the prime. The prime bore the cost to complete and the government got a very good job. In addition, the prime paid liquidated damages up front based upon a new (later)completion date as consideration for subbing out the entire performance. The contractor would have had to pay the government all these costs and much more had it defaulted and it would have taken much longer to reprocure. This was an Indonesian prime who got in over their head on what would now be about a $500 million contract. It was a win win for both parties. Yes, the contractor's performance evaluation did reflect the situation but it saved a lot of excess reprocurement and delay time and costs.

Do you agree with this AAP advice? Assume that it is being conducted pursuant to FAR 14.5 "Two-Step Sealed Bidding" Procedures. QUESTION: "What is the process for going from a competitive requirement (three vendors) to a sole source requirement (one vendor remaining)? Posted to Contracting on 10/23/2009 12:00:00 AM The Scenario? We are in the middle of a 2-Step Acquisition process. Step I, vendors provided bid samples for evaluation and testing. If vendors pass Step I they will proceed to Step II where an IFB is issued only to those vendors who particiapted and passed Step I. Only two vendors are in Step I, one of the vendors failed the testing and therefore will not proceed to Step II. The Question? Based upon the above information, do we continue with the process and issue the IFB to the remaining vendor? Or, do switch from this competitive requirement and award as a sole source to the remaining vendor?" ANSWER: "For clarification purposes -- your Subject line mentions three vendors while the Background information states that only two vendors participated in Step 1 of the bidding process. It doesn't really matter for purposes of this response, but I wanted to point that out in case there was some other issue you meant to pass along. Now to the main issue: The competitive process depends not only on actual competition (i.e., two or more offerors actually offering on a requirement), but also on apparent competition. For example, FAR 15.403-1©(1)(ii) states that there is adequate price competition if there ...was a reasonable expectation, based on market research or other assessment, that two or more responsible offerors, competing independently, would submit priced offers in response to the solicitation's expressed requirement, even though only one offer is received from a responsible offeror... Although that is from FAR Part 15 rather than Part 14, it is still relevant to this discussion. In addition, the FAR 6.301 policy on full and open competition revolves around whether the contracting officer provides for full and open competition. In your situation, there is no indication that full and open competition was not provided for. Thus, it remains a competitive requirement. As long as your procurement met the conditions required for use of two-step sealed bidding at FAR 14.502 (also see FAR 6.102(), you should be able to issue the IFB to the remaining vendor without treating it as a sole source procurement." Do you think that the advice to continue with an "IFB" conforms to FAR 14.5 or to common sense? See 14.503 (f) (1) "The contracting officer may proceed directly with step two if there are sufficient acceptable proposals to ensure adequate price competition under step two, and if further time, effort and delay to make additional proposals acceptable and thereby increase competition would not be in the Government?s interest. If this is not the case, the contracting officer shall request bidders whose proposals may be made acceptable to submit additional clarifying or supplementing information. The contracting office shall identify the nature of the deficiencies in the proposal or the nature of the additional information required. The contracting officer may also arrange discussions for this purpose. No proposal shall be discussed with any offeror other than the submitter." See also 14.503 (i) "If it is necessary to discontinue two-step sealed bidding, the contracting officer shall include a statement of the facts and circumstances in the contract file. Each offeror shall be notified in writing. When step one results in no acceptable technical proposal or only one acceptable technical proposal, the acquisition may be continued by negotiation. " I don't necessarily disagree with the advice to continue the acquisition but why would one continue with an "IFB", considering the above procedures called out in 14.503?

I agree with Vern. By the way, many public entities (states and cities) routinely disclose the names of competing firms after award and sometimes during competitions for design contracts, construction and design-build projects. Why is the Federal Government so different that this must remain a secret after award? What public interest is served by not revealing who competed? Back in the days of IFB's, everything was open, including bid prices. I have been involved in several service contract source selections during the past 20 years or so, but many or most all of those would probably have been bid "back in the day" before competitive negotiations were allowed on a relatively routine basis. So competitors would have routinely been named for service contract competition, too. The conditions for the requirement to conduct sealed bidding in paragraph 6.401 (a) don't mention the necessity nor the lack thereof to keep the names of the competitors secret after award. So, you cant just say that you are going to use competitive negotiations to avoid naming the competitors afterwards, if the conditions in 6.401 (a) are otherwise applicable. I'm sure there are ways to be able to do that on truly secret competitions. In other words, the reasons in FAR for using RFP in lieu of IFB don't include keeping the competitors' identities confidential. Keeping names and stuff like line item prices confidential after the competition is over seems to have morphed from the originally stated reasons for doing RFP's instead of IFB's.

FAR 15 section on debriefings prohibits point by point comparisons between the offeror and successful proposal. Would full ratings or scores constitute such? Plus the rating or scoring matrix is pre-decisional material in my opinion.

AlAL, FAR 24.202 prohibits release of proposals. I don't think it mentions release of the identity of offerors. I am on road today, but if you read the FAR procurement integrity regulations, I think that you will find that protection of offeror identity and number of firms involved applies during the source selection process, not afterward. I can't read FAR on my Blackberry but I have previously researched FAR for this and couldn't find a prohibition on releasing the number of firms or their identities after the SS was over. Now, I don't know when the source selection process is officially "over". I would think that after the debriefing and after the protest period is over should qualify as the "end" of the source selection.

I didn't totally understand your initial description of the ordering limits. Is the overall limit on the "new ID/IQ contract" within the individual per task order ordering limit on the original contract (amounting to a "contract" within a task order)?

Smells fishy to me.

Have been away at the hunting camp since last week. Here to Help, unless things have changed over the past couple of years, contractors weren't guaranteed every dollar of G&A originally allocated to a contract when the contract was terminated for convenience (or for delete changes). Nash and Cibinic, at least through the 3rd edition of "Administration of Government Contracts" explain that, for deductive changes, the government is due a credit for overhead and profit on delete changes. Thus, they weren't "guaranteed" all the costs that they originally contemplated or allocated to a job when they priced it. Beyond the case law, my logic argument, at least for construction TFC's, has been that many or most contractors have backlogs that they can redirect their resources to when there is a TFC. They don't automatically "underabsorb" G&A when there is a TFC or partial TFC. If that were true, then when we add work by change order to a contract, why should we allow any additional G&A? Using your logic, the contractor has supposedly already allocated its expected overhead to the contract. I agree that there may well be differences between service contracts and construction. Its interesting how Here to Help jumped on me when I said that contractors might adjust G&A rates to reflect differences between the past accounting period and the current business expectations. I also said that the DCAA may look to see that the rates are reflective of current business load. In his/her last post above, Here has said the same thing. Hmmm, it seems that the concept of "unabsorbed overhead" that was created to handle government caused suspension of work delays of indeterminate periods which prevented a contractor from seeking or obtaining replacement work has somehow morphed into an entitlement for any situation where the expected amount of work doesn't materialize. Termination for Convenience was not set up to "make the contractor whole" had it performed the contract. I'm not at home to read about it in N&C, but I believe TFC was developed to avoid breach of contract claims when the government had to terminate contracts due to changes in requirements. The TFC is intended to allow the contractor to recoup its costs invested in the performed and unperformed work, (unless it was in a loss position to begin with). If G&A is typically charged to a contract in the accounting system as a percentage of costs, then we should be consistent in a TFC settlement, an increase or deductive change. The US Court of Claims didn't state in Victory or in Foley, that the VEQ clause was set up to "make the contractor whole", either.

Let me simplify my point. I need a large area to be excavated. I know the overall quantities but don't know how much rock will be encountered. I negotiate a contract with a contractor. We agree to use unit prices for common and for rock excavation. I establish estimated quantities based upon local experience. In negotiating the unit rates, we agree on productivity rates and all the associated costs,such as rock drill rental, bringing in a dynamiter, site supervision, a job trailer, etc. To all these direct costs the contractor adds 10% for home office overhead or G&A and adds a profit percentage. The contractor charges every job 10% for G&A, based upon last year's accounting period. In the end, the unit price for rock excavation is ten times the unit price for common excavation. Then, the contractor performs the work but only 10% of the estimated rock excavation was encountered. We have the FAR VEQ clause in the contract. I agree to allow an adjustment to recover 85% of the contractor's one time and fixed costs associated with the rock excavation effort that weren't recovered during performance. No problem so far. Now, the contractor requests to be paid 85% the G&A that was included in the estimated quantity of the rock excavation bid item. I say, wait a minute - we priced G&A at 10% of the other costs based on your practice of charging all jobs 10%. Now you say - "no, I want the "unearned" overhead that I thought I was going to get, even though we both knew that rock excavation was a best guess. Now, don't pay any attention to the fact either that since there was less rock there was more common excavation than expected, so I recovered additional G&A for that overrun". But if it really bothers you, I will give you a credit for the extra G&A on common if you pay me the G&a I "lost" on the unperformed rock excavation." "Oh- also don't pay any attention to the fact that we finished the job sooner beca_se of the lower rock quantity and went on to another job - where I also charged 10% for G&A." My reaction would be BULL. I have paid you the agreed 10% rate on all quantities performed, including the overrun of common excavation. Plus, I will pay you 10% on every dollar included in our VEQ adjustment.I never guaranteed you 10% of the original contract price." The contractor replies - "Nope. There is a new Board decision that says you owe me 10% on every yard of rock excavation that wasn't necessary up to 85% of the estimated quantity. I'm guaranteed to be paid G&A on 85% of the original estimated quantity..." Sorry - that is a ridiculous conclusion to me.