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I would like some help with the probable outcome for this question. A CPFF term contract for $60MIL incrementally funded. The Government funds only $30MIL and extends the contract twice to continue performance, but still does not reach the full obligation. Now the contract is ending and no more funding will be obligated. The Schedule Obligated Amount clause says that the funds are allotted for "allowable costs (and fee if any)" (emphasis added). The contract includes the LOF clause 52.232.22. The Contractor realizes it has made an accrual mistake in the accruals of incurred costs and has a deficit of $1MIL over the obligated amount if you include the earned fee. Without counting the earned fee (CPFF term = LOE delivered x fee per day), the Contractor has incurred costs within the obligated amount. The performance was accepted and lauded by the client as Exceptional. The Contractor mistakenly relying on available funds numbers offered to the Government and with acceptance performed more work than originally planned for the same obligated amount. The Government argues that since no timely notification under the LOF clause was provided, the costs would not be reimbursed since the obligation covers costs and fee and the Government is not obligated to reimburse above the obligated amount. Cost Reimbursement Contracting (Cubinic and Nash) states under Control of Funding Limitation of Funds clauses, that if the "funds are allotted in a single figure, it has been held that the contractor can apply the full allotment to performance costs". Would this argument work in the scenario above? If the Government refuses, is this a legitimate claim argument? Many thanks.
Many of you are asking yourselves why a company would do such a thing. I admit that it does sound very crazy and I think a contractor can go too far to please the Government customer. I would like to know whether a contractor is allowed to use their fee from their CPFF completion contract to pay for an overrun on the contract. My gut tells me that this is not allowable because the contractor would be giving free services to the Government and think this can be linked to 52.203-3 Gratuities however the "free" services (services at no charge to the Gov't) would not be given to an individual (they would benefit the whole agency). To say it a different way, the contractor wants to forego invoicing the government for a few months of services on a CPFF contract to alleviate an overrun at their own expense. The contractor would also be satisfied and would agree to having the CO move the amount on the fee CLIN to the labor CLIN. Additional information about the overrun: The overrun is primarily caused by the Government adding NEW scope to the contract. I know that the Government is obligated to pay for the additional scope costs with fee. Maybe I am thinking down the wrong path and there is a much simpler answer out there. I have done google/wifcon searches but have not seen anything out there on this specific topic. As usual, your help is very much appreciated. 52.203-3 Gratuities. As prescribed in 3.202, insert the following clause: Gratuities (Apr 1984) (a) The right of the Contractor to proceed may be terminated by written notice if, after notice and hearing, the agency head or a designee determines that the Contractor, its agent, or another representative— (1) Offered or gave a gratuity (e.g., an entertainment or gift) to an officer, official, or employee of the Government; and (2) Intended, by the gratuity, to obtain a contract or favorable treatment under a contract. ( The facts supporting this determination may be reviewed by any court having lawful jurisdiction. © If this contract is terminated under paragraph (a) of this clause, the Government is entitled— (1) To pursue the same remedies as in a breach of the contract; and (2) In addition to any other damages provided by law, to exemplary damages of not less than 3 nor more than 10 times the cost incurred by the Contractor in giving gratuities to the person concerned, as determined by the agency head or a designee. (This paragraph ©(2) is applicable only if this contract uses money appropriated to the Department of Defense.) (d) The rights and remedies of the Government provided in this clause shall not be exclusive and are in addition to any other rights and remedies provided by law or under this contract. (End of clause)
Contractor's total allowable cost is going to exceed the target cost on our CPIF contract. How do we adjust the contract value without changing the target cost to comply with the limitation of cost and funds clauses for obligation purposes? Right now our contract value is the target cost. Target cost cannot be increased without an equitable adjustment.
Hi there, I work for a very, very small contractor and frankly, I'm embarrassed to even post this question. A year ago, my firm and a very large subcontractor verbally agreed to deobligate funds from CPFF purchase orders we had issued them. On my end, we worked the funding de-ob with the Government. After the de-ob was finalized with the Government but before we pulled back the funds from the subcontractor, the subcontractor submitted new invoices and stated they no longer agreed with our mutual agreement to de-ob X dollars. Looking back, it's obvious we should have deobligated the funds from the Subcontractor prior to asking the Government to process a deobligation (Yes, yes... yet another reason my tail is tucked. We have since changed our ways). As the prime contractor, I feel as though we were never given a bonafide reason for their change of heart nor any kind of reasonable explanation for the new invoices/charges when all work was supposedly complete. I also believe they are trying to throw their weight around and bully us into submission using their big name and reputation. We have yet to pay the invoices because we think they are full of it. As you can imagine, they are ticked. Bottomline: I need to "find" an extra $100K for my prime CPFF contract. The unpaid invoices are on a closed CLIN and closed Contract (closed last year). I don't have any extra money on that closed CLIN. What are my options in fixing this? They are driving me crazy and I'm sure they are saying the same. Ack. Humbly, StillTrucking