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Found 4 results

  1. Per FAR 46.407(e), “The contracting officer must discourage the repeated tender of nonconforming supplies or services, including those with only minor nonconformances, by appropriate action, such as rejection and documenting the contractor’s performance record.” In addition, per FAR 46.407(f), “When supplies or services are accepted with critical or major nonconformances as authorized in paragraph (c) of this section, the contracting officer must modify the contract to provide for an equitable price reduction or other consideration. In the case of conditional acceptance, amounts withheld from payments generally should be at least sufficient to cover the estimated cost and related profit to correct deficiencies and complete unfinished work. The contracting officer must document in the contract file the basis for the amounts withheld. For services, the contracting officer can consider identifying the value of the individual work requirements or tasks (subdivisions) that may be subject to price or fee reduction. This value may be used to determine an equitable adjustment for nonconforming services. However, when supplies or services involving minor nonconformances are accepted, the contract need not be modified unless it appears that the savings to the contractor in fabricating the nonconforming supplies or performing the nonconforming services will exceed the cost to the Government of processing the modification.” In our specific case, there is a large business under a Firm Fixed Price supply contract that provides progress payments (at 80%) to the Contractor on a contract line item number (CLIN) that has been previously conditionally accepted via a DD250. At the time the CLIN was conditionally accepted the withhold amount was negotiated and established based on the remaining outstanding requirements not being met on contract (also known as deficiencies) and commensurate consideration was received from the Contractor to the Government for not meeting the outstanding contractual requirements. In addition, a new delivery date was negotiated and the contract was modified to extend the date of the CLIN so the Contractor could complete the outstanding requirements and deliver a conforming supply item. The Contractor has asked the Contracting Officer to establish a new withhold amount so partial payment can be made based on completion of some of the outstanding requirements since they have delivered that capability to date to the Government and partially resolved part or most of the outstanding requirements for the CLIN. There are still some outstanding requirements left to fulfill on the CLIN. QUESTION: Is it appropriate for a Contracting Officer to establish another withhold amount based on the remaining outstanding requirements and partially pay the Contractor for the requirements that have been delivered to the Government to date, even though there are some outstanding requirements the Contractor still needs to meet? If so, can the PCO establish and authorize multiple withholds and then release payments against the withheld amounts for a single CLIN? Or, once we establish a withhold for a conditional acceptance, does the Contractor only get paid the full withheld amount upon satisfying all of the remaining contractual requirements whether they are delivered to the Government incrementally or not? Thus, only one withhold would be established for the CLIN, with the full withhold amount paid upon completion, regardless of whether or not some of the outstanding
  2. There is a debate in my office regarding whether acceptance of services occurs as the contractor performs the services or after the Government has taken some additional action, such as inspecting the services and executing a receiving report. Some individuals believe that because someone allowed (by inaction) a contractor show up to perform the work required by the contract on a daily basis (ongoing support service), that we’ve automatically accepted those services at the end of the day. The underlying issue that created this argument is whether one of our customers without authority, and through no action of their own, accepted a contractor's services while there was a lapse in funding on the contract on an incrementally funded contract. Our (civilian) agency receives different types of services. Some services occur offsite, where we do not see the services as they are performed, and some occur onsite (e.g., acquisition support services), where contractor employees work side-by-side with government personnel. The onsite contractor employees usually show up for work, much like feds do, and perform the work required by the contract. On occasion we run into the situation where additional funds were not added quickly enough to an incrementally funded contract and the contractor continued to work at risk. The question then becomes whether someone accepted those services and whether an unauthorized commitment has occurred. I don't believe that there is an unauthorized commitment, but the issue here is whether the services were accepted. FAR 46.5 discusses acceptance of supplies and services. This part states that acceptance may take place before delivery, at the time of delivery, or after delivery. If performance is given the same treatment as delivery, with the exception of acceptance before performance, I think that this statement applies equally to performance; i.e., acceptance may take place at the time of performance or after performance. The part states further that Acceptance shall ordinarily be evidenced by execution of an acceptance certificate on an inspection or receiving report form or commercial shipping document/packing list, which seems to imply that in order to denote acceptance, the Government must take some administrative action, such as executing a receiving report. Lastly, the part states that Supplies or services shall ordinarily not be accepted before completion of Government contract quality assurance actions, which seems to imply that a service cannot be accepted and should not be considered accepted until the Government performs some type of inspection process. I’d like to know at what point after a contractor has performed its services are the services considered accepted by the agency. Are services considered accepted only after a service has been inspected and accepted by executing a receiving report or through one of the other means specified in 46.5? Or does the fact that the contractor showed up for work and performed a task in accordance with the contract constitute acceptance at the end of the day? Regarding receiving reports, we provide them only to our payment center to authorize payment of services invoiced by contractors. We do not provide the receiving report to contractors. This isn’t a matter of policy, but simply a matter of practice that no one on either side has questioned. Must the receiving report be provided to the contractor? If not, how does the contractor know we accepted the service? I do not have access to chapter 9 of Administration of Government Contracts (Inspection, Acceptance and Warranties)
  3. A somewhat lively discussion recently took place in the contracting office. Here is what happened: The agency was operating in a sole source environment with a contractor (as authorized by statute). The agency had a contract for commercial services that was terminating at the end of the month. The agency issued an RFP to the contractor for an additional six months of services. At month’s end, the contractor (and now the offeror) submitted its proposal to the agency. The offer contained proposed changes to the RFP's terms. Discussions were held with the offeror, and revised terms were agreed upon. However, there was no time for the offeror to submit a final proposal revision, and the Contracting Officer could not sign the original offer (due to the proposed changes in terms that were unacceptable to the government). The Contracting Officer then issued a unilateral purchase order to the offeror, in the amount of $450,000.00. This purchase order incorporated the previously agreed upon changes in terms. The Contracting Officer’s decision came under fire immediately, and he was told that he could not simply send out a unilateral purchase order; he had to send out an unsigned contract (forgive the oxymoron), and allow the offeror to sign first. The Contracting Officer countered, stating that regardless of the issuance of the prior sole source RFP and any discussions held with the offeror, he was not prohibited from issuing a unilateral purchase order. He acknowledged that the incumbent contractor was free to reject the purchase order (i.e. the government’s offer to buy future services), but reasserted that there was no prohibition on the issuance of the order. He further stated that performance by the contractor (at the start of the next month) would constitute acceptance, and that a bi-laterally signed SF1449 was desirable, but not required to form a contract. Was this Contracting Officer in the wrong?
  4. Is there a legislative authority or a regulation that requires the Contracting Officer's Representative (COR) to acknowledge acceptance of their designation letter by signing and returning the COR acceptance page to the Contracting Officer?
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