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Showing results for tags 'request for equitable adjustment'.
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BLUF: I had a contractor that was hit with a 10% increase in customs fees. I'm on the fence about approving this REA and am requesting input. I am in a foreign country and have a contract for the delivery of a commodity in May of 2025. In January of 2025, the country's government introduced a 10% increase in customs fees which resulted in a $43K increase for the contractor. Facts to consider: Contract Awarded in Sep 2024 with delivery required in March 2025 The country's government added the additional fee on 31 Jan Request for Equitable Adjustment from the contractor and all documents submitted appropriately Contractor is foreign based and the items came from USA FAR 52.216-4 and 52.229-6 are included in the contract My current line of thinking: The contractor did everything correctly, and because the cost increase was not foreseeable, I believe this REA should be approved for the full amount. *I do recognize that the decision to approve this adjustment and for how much is up to me, but as I have not encountered this situation before and am not bound by a time restriction, I'd like to discuss. There may very well be parts of the FAR or legal precedent I am not aware of. I will also be discussing this with my legal office. -
Hello WIFCON! Would love some input here from any knowledgeable folks about this... I am an Army PCO tasked with negotiating a request for equitable adjustment (REA) on a fixed price commercial contract for severable services that I recently inherited from a predecessor PCO. It's $5.6M, five year contract (base + four option years). The initial award was about two years ago--we are currently in the first option year. Shortly after award, during the base year, the Government realized it had vastly underestimated the magnitude and needed additional performance out of the contractor, and so the contract was modified (five times over the course of the first two years) to pull forward performance scope from the out years. So now the contractor has submitted an REA for additional OH costs related to administrative burden and greater than anticipated subcontracting costs in order to meet accelerated deadlines. The REA amount is significant, and the circumstances are much more complicated than what I'm able to provide in this forum, but, basically I've determined the REA has merit, and I'm trying to write up my merit analysis and price negotiation memo. I have a few questions I'm hoping someone can help me with. THANKS! SCOPE: As I said, I'm inclined to determine the REA has merit, but my analysis leads me to believe that we're dealing with an out of scope change. I say this after reviewing the Contract Attorney's Deskbook (Chapter 21), which outlines several factors to consider for scope determinations. Ultimately, to me the cumulative effect of all the prior changes may have constituted a "cardinal change". If that's the case, what's the change authority I'd use for the modification? In my experience, typically out of scope changes require a J&A, and with a J&A I'd use the applicable J&A authority as my mod authority--but that doesn't make sense since this is an REA, right? I'm not going to write up a J&A for all the contract changes that ALREADY happened am I? (Seems to me the modification associated with the negotiated REA is only to equitably adjust the contract as a result of the constructive changes leading up to this point.) Often I use the changes clause 52.243-1 as my modification authority, but it's my understanding that the changes clause 52.243-1 is only good for WITHIN-SCOPE changes. And since this is an REA and not a claim (yet, at least), using the disputes clause 52.233-1 wouldn't be correct either. So what do I put in the SF-30? FUNDS: I assume the fiscal law associated with an REA is the same as any other modification? I.e. Within scope modifications use award year money and out of scope modifications use current year money? Other related details: each of the aforementioned modifications were done bilaterally. The contractor signed each SF30 without a price proposal, but all along he was corresponding with the PCO and COR that he felt the contract scope was creeping larger and larger and as a result he was facing cost impacts he hadn't anticipated.