Delivery Order extended after the PoP

[Birdsong]

Have a delivery order issued off a IDIQ contract. The IDIQ ordering period doesn’t end until March 2025. The delivery order had a had a delivery date from date of award +365, so April 15, 2023-April 14, 2024. So, delivery should have been made; however the contractor needs an extension. My concern is that the request for extension was made May 1, 2024, which is after the delivery date. Can an extension be done after the PoP of the delivery order has ended?  

[Jamaal Valentine]

Hi @Birdsong,

 Before you start fielding questions on this new post, I encourage you to reread Rule 17. I anticipate you’ll receive more questions than answers, initially. Be prepared to respond.

[joel hoffman]

Absolutely . Please provide context to the situation.

[Jamaal Valentine]

4 hours ago, Birdsong said:

Can an extension be done after the PoP of the delivery order has ended?  

Yes.

[Birdsong]

47 minutes ago, Jamaal Valentine said:

Yes.

On what authority? 52.216-22(d)

[jjj]

Birdsong, Are you the contracting officer?  If YES, your options include:

- refuse late delivery and make no payment;

- terminate the delivery order for cause or default;

- negotiate a new delivery date with consideration from the contractor;

- unilaterally establish a new delivery date;

- accept late delivery without a modification extending the delivery date.

- something else.

What do you want to do?

[Jamaal Valentine]

4 hours ago, Birdsong said:

On what authority?

It depends. Let’s start by identifying what termination for default (including cause) clause applies to the delivery order. Also, is there an excusable delay under the clause? Absent an excusable delay, you’ll be looking for a general authority to change the delivery date. Here, the parties may agree to change the delivery date - generally, with consideration.

4 hours ago, Birdsong said:

52.216-22(d)

No.

Keep in mind, changes may be made to a contract at anytime before final payment on the contract. Also, doing nothing or delaying taking action could be problematic. Under the waiver doctrine, the government’s right to terminate for default may be waived if the government fails to terminate within a reasonable period of time after the default. See Administration of Government Contracts, 5th ed., pp. 843-57, Waiver of Right to Terminate.

[ji20874]

17 hours ago, Birdsong said:

My concern is that the request for extension was made May 1, 2024, which is after the delivery date. Can an extension be done after the PoP of the delivery order has ended?

Yes.

Absolutely yes, it can be done -- it isn't mandatory, but certainly, it can be done -- and it often is.

No one would ever imagine otherwise.

[Retreadfed]

7 hours ago, Jamaal Valentine said:

Keep in mind, changes may be made to a contract at anytime before final payment on the contract.

Do you have authority for this statement?  I have always contended that the government cannot issue a change order after final acceptance and delivery/performance of the contract.

[Vern Edwards]

@Retreadfed

Jamaal's statement contains an assertion and an implication.

The assertion is that the parties may change a contract at anytime before final payment.

The implication is that the parties may not change a contract after final payment.

Do you want "authority" for the assertion, the implication, or both?

What will you accept as "authority"--statute, regulation, policy, case law, expert opinion? Any of those? Some of those?

 

[REA'n Maker]

2 hours ago, Retreadfed said:

I have always contended that the government cannot issue a change order after final acceptance and delivery/performance of the contract.

How do you handle a final rate determination on a physically complete OTFFP contract?

[Retreadfed]

3 hours ago, Vern Edwards said:

What will you accept as "authority"--statute, regulation, policy, case law, expert opinion? Any of those? Some of those?

Ideally, case law.  I learned a long time ago that statutes, regulations and contracts mean what the courts say they mean.  Absent case, law, a statute or regulation.

[Retreadfed]

1 hour ago, REA'n Maker said:

How do you handle a final rate determination on a physically complete OTFFP contract

What do you mean by OTFFP contract?  That is a new one on me.

[REA'n Maker]

20 minutes ago, Retreadfed said:

What do you mean by OTFFP contract?  That is a new one on me.

Other Than Firm Fixed Price (CPFF, etc.).  Also see FAR 42.705.

[Retreadfed]

1 hour ago, REA'n Maker said:

Other Than Firm Fixed Price (CPFF, etc.).  Also see FAR 42.705.

Can you be more specific?  There are several contract types that are not FFP that do not require the establishment of final indirect cost rates.  However, in regard to cost reimbursement contracts, I don't see anything that ties the establishment of final rates to the government's ability to issue a change order to a contract.  FAR 52.216-7 doesn't mention change orders.  Similarly, 52.243-2, the cost reimbursement Changes clause doesn't mention final indirect cost rates, although it does state that any request for an equitable adjustment resulting from a change order must be submitted before final payment on the contract.  Further, the Changes clause does not specifically address when a change order can be issued.  It uses the phrase "at any time" which implies until infinity which I hope no one would argue for.

[REA'n Maker]

6 hours ago, Retreadfed said:

I have always contended that the government cannot issue a change order after final acceptance and delivery/performance of the contract.

Are you talking about modifications citing the Changes clause as the authority, or any modification?    My point is that cost-type contracts are modified all the time after they are physically complete (not necessarily under the Changes clause).  

[Jamaal Valentine]

3 hours ago, Retreadfed said:

Ideally, case law.  I learned a long time ago that statutes, regulations and contracts mean what the courts say they mean.  Absent case, law, a statute or regulation.

Without research I am not willing to do--right now--I cannot cite a specific case that clearly spells out support for my assertion (NOTE: this law firm and the 2023 Contract Attorneys Deskbook, p. 21-7, say the same thing I did).

Now, I don't think you dispute that, generally, parties that may enter into a contract may also change said contract by agreement. If you agree, perhaps the easiest way to think about this is to consider that contracts may be changed by the parties that enter them. The parties may do so until the parties are discharged from the obligations under them. Remember, a lapse in completion or delivery dates doesn't terminate a contract or cause it to 'expire' so the parties are free to make changes (e.g., supplemental agreements).

Remember too, the contracting officer may receive and act upon a proposal for an equitable adjustment under the changes clause if it is submitted before final payment of the contract. E.g., FAR 52.243-1(c). Are you familiar with the doctrine of final payment?

[Retreadfed]

1 hour ago, REA'n Maker said:

Are you talking about modifications citing the Changes clause as the authority, or any modification? 

Change orders under the Changes clause.

[Retreadfed]

Jamaal, lets back up a little.  Birdsong asked "Can an extension be done after the PoP of the delivery order has ended?" to which you replied "yes."  I have no problem with that answer.  Later you stated "Keep in mind, changes may be made to a contract at anytime before final payment on the contract."  I then asked about the timing of issuing "change orders."  Thus, we may be talking past each other.  Your statement is rather broad and could include changes that are not change orders under the Changes clause.  My question relates specifically to change orders under the Changes clause although I did not mention the Changes clause in my earlier post.

[Jamaal Valentine]

@Retreadfed

I guess I missed your intent. I was only responding to your question. (And my answer does include changes outside of the changes clause)

9 hours ago, Retreadfed said:

Do you have authority for this statement?

I believe you and REA were addressing your contention that followed your question. I wasn’t interesting in that part other than reading your response to REA’s question. (Only you introduced change orders…that’s not in the OP nor my response).

[Krimz]

On 5/2/2024 at 8:17 AM, Retreadfed said:

Do you have authority for this statement?  I have always contended that the government cannot issue a change order after final acceptance and delivery/performance of the contract.

A counterquestion:  what prohibits a CO from modifying a contract after final acceptance and delivery/performance of a contract?  As long as the change is within scope, I'm not sure it's prohibited.

[Retreadfed]

52 minutes ago, Krimz said:

A counterquestion:  what prohibits a CO from modifying a contract after final acceptance and delivery/performance of a contract?  As long as the change is within scope, I'm not sure it's prohibited.

Are you asking about modifying a contract or issuing a change order under the Changes clause?  These are not necessarily the same thing.  

[Krimz]

16 hours ago, Retreadfed said:

Are you asking about modifying a contract or issuing a change order under the Changes clause?  These are not necessarily the same thing.  

You mentioned change order, so that's what I was replying to, but the same goes for general contract modification.

[Retreadfed]

23 minutes ago, Krimz said:

You mentioned change order, so that's what I was replying to, but the same goes for general contract modification.

You conditioned your assertion on the change being within the general scope of the contract.  So let's explore that.  For both fixed price and cost reimbursement supply contracts, the respective clauses allow for the following changes  

(1) Drawings, designs, or specifications when the supplies to be furnished are to be specially manufactured for the Government in accordance with the drawings, designs, or specifications.

(2) Method of shipment or packing.

(3) Place of delivery.

Under (1) the government is permitted to change the specs for supplies if the supplies "are to be" produced in accordance with those specs.  This language is prospective.  This is significant because acceptance of supplies transfers title to the government.  Thus, once the government has title to the supplies, w are no longer talking about manufacturing those supplies.  Instead, if something is to be done to those supplies, it seems the government would want to be modifying its property.  This would be a new requirement, i.e., modification vice manufacture, that needs to be accomplished under a new contract. 

 On the other hand, if the supplies are not to be manufactured in accordance with specified specs, those specs cannot be changed.  What can be changed is the item to be delivered.  Again, if you are substituting one item for another, i.e., a Ford for a Chevy, it seems this would be a new procurement.

Turning to (2) and (3) once the accepted supplies have been delivered, how is the government going to make the changes described there?  Again, if the government wants to move its property from point A to point B, it seems this is a new procurement.

In regard to services, similar considerations apply.  Once the services have all been performed satisfactorily, it seems if the government wants more or different services from the contractor, a new contract or order would have to be issued.  In other words, the government could not use a change order to a completed contract to acquire new services.

As regards, mods in general, I would say there is no absolute answer.  Some mods, such as final cost determinations under cost reimbursement contracts could be permissible, but others such as a T4C may not be.

[Krimz]

4 minutes ago, Retreadfed said:

You conditioned your assertion on the change being within the general scope of the contract.  So let's explore that.  For both fixed price and cost reimbursement supply contracts, the respective clauses allow for the following changes  

(1) Drawings, designs, or specifications when the supplies to be furnished are to be specially manufactured for the Government in accordance with the drawings, designs, or specifications.

(2) Method of shipment or packing.

(3) Place of delivery.

Under (1) the government is permitted to change the specs for supplies if the supplies "are to be" produced in accordance with those specs.  This language is prospective.  This is significant because acceptance of supplies transfers title to the government.  Thus, once the government has title to the supplies, w are no longer talking about manufacturing those supplies.  Instead, if something is to be done to those supplies, it seems the government would want to be modifying its property.  This would be a new requirement, i.e., modification vice manufacture, that needs to be accomplished under a new contract. 

 On the other hand, if the supplies are not to be manufactured in accordance with specified specs, those specs cannot be changed.  What can be changed is the item to be delivered.  Again, if you are substituting one item for another, i.e., a Ford for a Chevy, it seems this would be a new procurement.

Turning to (2) and (3) once the accepted supplies have been delivered, how is the government going to make the changes described there?  Again, if the government wants to move its property from point A to point B, it seems this is a new procurement.

In regard to services, similar considerations apply.  Once the services have all been performed satisfactorily, it seems if the government wants more or different services from the contractor, a new contract or order would have to be issued.  In other words, the government could not use a change order to a completed contract to acquire new services.

As regards, mods in general, I would say there is no absolute answer.  Some mods, such as final cost determinations under cost reimbursement contracts could be permissible, but others such as a T4C may not be.

The right answer is usually, "it depends," but I do not know of anything that explicitly prohibits changes (of any kind) after final payment/acceptance.  

To be more specific, there are plenty of things that might preclude a change, but I don't know of anything that prohibits it.