Jump to content

Early Award with Delayed Period of Performance


Recommended Posts

And the solicitation should be amended if necessary after such discussions, before award to reflect any change in price and to indicate any delay between award and start of performance.

Link to comment
Share on other sites

  • Replies 60
  • Created
  • Last Reply

Top Posters In This Topic

On 6/19/2024 at 6:17 AM, FLContracts said:

The projected award date stated in the solicitation was Apr 30th, and the current contract expires on May 1st.

My PCO and I are considering awarding the contract on Feb 1st but with an effective date and period of performance starting on APR 30th. Essentially, we'd be making an early award with a delayed period of performance.

@joel hoffmanThe OP said the solicitation "projected" an award date of April 30. I presume the start of performance would have been either April 30, May 1, or May 2, but the the OP did not make that clear.

They received one proposal and want to accept it ("award") on February 1 instead of April 30. The OP did not say why. Maybe just to get it over with. Might have been an anti-preaward protest tactic. Who knows? In any case, i do not see any need to amend the solicitation, and I wouldn't do so. Besides, see FAR 15.206(c).

The "delay" would be the gap between the February 1 award date and the April 30th effective date.

The issue that would concern me is whether anything that happens during the gap between the February acceptance date 1 and the April 30 "effective date" might affect the rights and duties of the parties. The parties might decide not to worry about it. Or they might decide to meet, think about it, and discuss it.

What would you do? Knowing you, I'd bet you'd want to do the latter. What if it were an FFP construction contract and some human or natural cause affected site conditions after award but before the effective date? (I don't know the answer to that.)

Link to comment
Share on other sites

I was just going to leave this thread, but I can not.  My delayed response is a result of travel, some thinking, some research and further comments as the thread continues.

In reverse order -

5 hours ago, joel hoffman said:

If the government wants to “award early” and delay start of performance, which wasn’t indicated in the solicitation, it can discuss this and any implications with the sole offeror prior to award. This would be consistent with the DoD procedures for when only one offer is received.

It depends, I hope anyone following this thread does seek DoD guiding principles in DFARS 215.371 to know what is consistent with regulation (DFARS).

On 6/21/2024 at 7:15 AM, formerfed said:

What does asking grilling questions on ensuring competition and determining price reasonableness when only one offer received have to do with FLContracts question?

I am concerned about this view.   People called out management and now call out a Forum whose intent is to provide guidance.  In my view any poster should be ready for hard questions offered for a hoped for response from the poster or offered as simply rhetorical to make the poster think.   Not just hey you will be fine, go fot it.   I would suggest answering the hard questions is best prior a poster moving forward on a matter presented to Forum.   I think it is the professional way to proceed.

 

On 6/21/2024 at 7:15 AM, formerfed said:

These kind of questions like an auditor might ask just drives people away.  

I think most of the responses have not respected Rule 20. of Forum.  Likewise I was reminded of this thread which I think has been slipped to the shadows over time.

https://www.wifcon.com/discussion/index.php?/topic/5948-how-should-we-respond-to-posters-questions/page/2/#comment-51409 

Overall this is my best attempt on my part to provide references to support my "I think" about the course of the discussion in this thread.    I do wonder?   Is this discussion thread emblematic of a constant theme that seems to crop up in many Form discussions?   The quality of the current work force?   Afterall I learned very early on in my career to be prepaed to face hard questions to defend my position on a matter to any and all, both inside and outside the walls of government.   I may be mis-reading but the replies came across to me as " Because I said so".   I hope the OP does not replicate and simply say to management "Because _____________ said so and you should not even have asked me to defend my (and the PCO's) recommended course of action."

 

Link to comment
Share on other sites

2 hours ago, C Culham said:

It depends, I hope anyone following this thread does seek DoD guiding principles in DFARS 215.371 to know what is consistent with regulation (DFARS).

I am concerned about this view.   People called out management and now call out a Forum whose intent is to provide guidance.  In my view any poster should be ready for hard questions offered for a hoped for response from the poster or offered as simply rhetorical to make the poster think.   Not just hey you will be fine, go fot it.   I would suggest answering the hard questions is best prior a poster moving forward on a matter presented to Forum.   I think it is the professional way to proceed.

Bringing up price reasonableness again, especially after FLContracts said pricing is fine, and questioning why competition wasn’t received is off topic.  Questions like that also frustrate and intimidate people from asking questions here.  We’re supposed to answer questions and help.  Not bring up a bunch of “got ya’s”

So we disagree.  You say it’s the professional way to proceed.  I say it’s too typical of the 1102 workforce - reacting out of fear of criticism and protests

Link to comment
Share on other sites

And who the heck is going to protest an acquisition they didn’t participate in because why? The government decided to make an earlier award but the performance time doesn’t change? Gimme a break already. 

 

Link to comment
Share on other sites

8 hours ago, formerfed said:

Bringing up price reasonableness again, especially after FLContracts said pricing is fine, and questioning why competition wasn’t received is off topic.

I agree that there is no reason to question the award or the pricing in connection with the OP's inquiry.

The issue for me is the three month gap between the date of award and the date on which the contract will become effective. The OP's management seems to be uncertain about it and has tasked the OP to look into the matter. The OP should not go back and say, "No problem" based on the responses they got here without first trying to understand and report what, if any, the potential implications might be. 

Why award so far in advance? What's the rush? What are the apparent advantages and possible disadvantages of doing such a thing? If I were the boss I would not be pleased if the OP came back to me and said they posted at Wifcon and were told "no problem" and "see FAR 1.102"

I think the OP's management's assignment was an opportunity to learn. When I ran an office and a trainee or a junior specialist asked about something like that I would often say, "Research it and come back and tell me what questions you asked yourself, what your research sources were, and what answers you found. Some of my trainees told me years later, when they ran shops of their own, that they learned a lot that way.

But it appears that there are two schools of thought here Let's call them "pragmatically expeditious" and inquisitively cautious," and that they cannot be reconciled among the participants in this forum.

After 50 years, I am happy in this case to be inquisitively cautious.

Hang in there, everybody.

Link to comment
Share on other sites

I appreciate all the feedback on my original question. To clarify, this is a CPFF LOE SeaPort Task Order where all work is issued via Technical Instructions (TIs). The term "bid" comes from the Navy's one-bid tripwire guidance. We received one bid from the incumbent, and we negotiated the contract fee down.

Regarding the estimated award date in Section L/M, it clearly states that it's an estimate. Things can change over a year, and if we had multiple bids, our SSEB report and BCM would have taken much longer. In this case, we were able to be ready to award well ahead of PALT.

My original question was whether we can award a contract 90 days before the period of performance start date. Based on my research, there are no regulations prohibiting awarding a contract ahead of the commencement date of performance. However, funding considerations are crucial.

The key factor is the type of funds being used, as outlined in the DOD Financial Management Regulation (FMR). In our case, we're using no-year funds, which allows for more flexibility to cross FY if necessary.

Advantages of early award include:

  1. Getting over the protest window earlier, reducing uncertainty (if competitive).
  2. Allowing the contractor to prepare for the new contract period, including updating necessary documentation or systems, staff, etc.
  3. Enabling current TO to utilize any remaining funds on the current contract and minimize doing a De-Ob
  4. Providing more time for the contractor to plan for seamless continuity of services under the new contract terms.
  5. Beating PALT, which is a significant efficiency gain.

These advantages contribute to a more efficient contract renewal and start of the new performance period. The early award doesn't change the period of performance; it simply allows for better preparation and utilization of time before the POP begins. My PCO and submitted this for managements! Lets see what they say!

Link to comment
Share on other sites

On 6/22/2024 at 10:53 AM, Vern Edwards said:

The issue that would concern me is whether anything that happens during the gap between the February acceptance date 1 and the April 30 "effective date" might affect the rights and duties of the parties.

To Vern's point, I recall a case some years back where there was a gap between the date a cost reimbursement contract was signed and the backdated start date.  In this case, the cost principles were changed in the interim and a dispute arose as to which version applied to the contract.  The version in effect when the contract was signed was favorable to the government while the version in effect on the start date was favorable to the contractor.  Here, the court accepted the contractor's argument.

Edited by Retreadfed
typo
Link to comment
Share on other sites

50 minutes ago, FLContracts said:

CPFF LOE  Task Order

This fact alone is a very salient piece of information that would have been very helpful with with regard to responding to the original post.

For the good of the order - From now on in Forum my very first question to any post is going to be is the "contract" a standalone contract or an order (task or delivery) under the broad category of multiple award IDIQ contract.

Link to comment
Share on other sites

52.216-7, Allowable Cost and Payment (AUG 2018), paragraph (a):

Quote

The Government will make payments to the Contractor when requested as work progresses, but (except for small business concerns) not more often than once every 2 weeks, in amounts determined to be allowable by the Contracting Officer in accordance with Federal Acquisition Regulation (FAR) subpart  31.2 in effect on the date of this contract and the terms of this contract. [Emphasis added.}

What's the "date of this contract"? The date signed or the effective date? I don't know the answer. Might be good idea to include a stipulation in the contract, eh?

Link to comment
Share on other sites

Several FAR clauses use the phrase "the effective date of this contract." See, e.g., FAR 52.229-4, Federal, State, and Local Taxes (State and Local Adjustments) (FEB 2013), paragraph (a):

Quote

Contract date means the effective date of this contract and, for any modification to this contract, the effective date of the modification.

Maybe "inquisitively cautious" isn't such a bad approach.

Link to comment
Share on other sites

17 minutes ago, Vern Edwards said:

52.216-7, Allowable Cost and Payment (AUG 2018), paragraph (a):

What's the "date of this contract"? The date signed or the effective date? I don't know the answer. Might be good idea to include a stipulation in the contract, eh?

I believe the case Retreadfed alluded to answered that question. (Was it AT&T? I don't have time to research right now.) The answer provided by the court was "the effective date" not the award date.

Link to comment
Share on other sites

9 minutes ago, here_2_help said:

I believe the case Retreadfed alluded to answered that question. (Was it AT&T? I don't have time to research right now.) The answer provided by the court was "the effective date" not the award date.

I have searched but did not find any case in which a board or the COFC held that "the date of this contract" meant "the effective date", but my research was hasty. I found many cases in which there was an issue as to which of the two dates was applicable to the resolution of a conflict. The fact that in several clauses the FAR makes a distinction between the date of award and the effective date might be persuasive to a board or court.

Link to comment
Share on other sites

See: Determining Applicable Statutes and Regulations: What Date Governs?" The Nash & Cibinic Report, March 2004. Excepts quoted:

"The rights of the parties can vary significantly depending upon which version of a statute or regulation applies to the contract. Thus, when statutes or regulations change after the parties have entered into a contract, the question arises whether the new statute or regulation applies to the contract. The general rule is that postcontract regulations do not determine the parties' rights. E.g., Boeing Aerospace Operations, Inc., ASBCA 46274, 94-2 BCA ¶ 46274, 36 GC ¶ 348. The same rule has been followed with respect to statutory changes. See General Dynamics Corp. v. U.S., 47 Fed. Cl. 514 (2000), 42 GC ¶ 388, relying on U.S. v. Winstar Corp., 518 U.S. 939 (1996), 38 GC ¶ 322, and Yankee Atomic Electric Co. v. U. S., 112 F.3d 1569 (Fed. Cir. 1997), 39 GC ¶ 281. However, ascertaining whether a statute or regulation applies to the contract requires consideration of a number of factors. First, the date of contract formation must be determined. Second, the clauses that incorporate statutes or regulations use differing language to describe the event that determines the date of applicable statutes or regulations. Finally, the contract may contain an “effective date” that differs from the date or dates when the written document was signed.

***

There are many FAR clauses that base their coverage on a specified date. Some use the term “date of contract” or “contract date.” See, for example, FAR 52.211-8, “Time of Delivery” (delivery within a specified numbers of days “after date of contract”); FAR 52.216-2, “Economic Price Adjustment- Standard Supplies” (adjustment limited to “established price in effect on the contract date”); and FAR 52.216-13 “Allowable Cost and Payment-Facilities” (allowability determined by Cost Principles “in effect on the contract date”). Other clauses use the term “contract award.” See, for example, FAR 52.222-26 “Equal Opportunity” (application to Office of Federal Contract Compliance Programs to be made within 30 days after contract award); FAR 52.222-49 “Service Contract Act-Place of Performance Unknown” (postcontract wage determination retroactive to date of contract award); FAR 52.230-5 “Cost Accounting Standards-Educational Institution” (adjustment for accounting principle amendment effective after date of contract award); and FAR 52.232-30 “Installment Payments for Commercial Items” (number of payments based on number of months from date of contract award).

***

The term “effective date” has been sometimes used by boards and courts to merely refer to the date that the contract came into existence. See, for example, Brownlee v. DynCorp, 349 F.3d 1343 (Fed. Cir. 2003), 45 GC ¶ 488, and Johnson Management Group CFC, Inc., HUDBCA 96-C-132-C15, 99-2 BCA ¶ 30520. See also the FAR 52.229-3 “Federal, State, and Local Taxes” clause, which states: “‘Contract date’ means the date set for bid opening or, if this is a negotiated contract or a modification, the effective date of this contract or modification.” (Emphasis added.) It is a different situation where the parties designate an “effective date” that is different from the date or dates when the contract was awarded or formed.

• Effective Date Different From Document Execution Date-In some cases, the “effective date” specified in the contract may be prior to or subsequent to the date or dates when the contractor and Government signed the document. The question then is which of the dates govern the clauses incorporating regulations. That issue was present in DynCorp Information Systems, LLC v. U.S., 58 Fed. Cl. 446 (2003). In DynCorp, the letter contract at issue was signed by the contractor on August 27, 1991, and by the Contracting Officer on September 3, 1991. It also stated that the “effective date” was January 1, 1990. The contract contained a “Pricing of Adjustments” clause stating that pricing was to be governed by the Cost Principles “in effect on the date of this contract.” The Cost Principles changed to the detriment of the contractor (that's what usually happens) between the effective date and the date of the parties' signatures. The Government argued that the changed version of the Cost Principles applied. Based on the unique facts of the case, the Court of Federal Claims finessed the question, finding that the “effective date” was the same as the date of contract formation. The contractor had been performing services and the Government had been accepting the services for 20 months prior to the date of the written document. Thus, the court never reached the question of what the result should be when the dates differ.

[Emphasis added. That might be Retread's case.]]

***

As can be seen from the above discussion, determining the date of acceptance depends upon many factors, not the least of which is the still uncertain role of the “mailbox rule.” The Rhode Island Tool decision has yet to be reviewed by an appeals court, and the board decisions distinguishing it on the basis of the changed language are rather sparse. One of the ways for the parties to bring some degree of certainty into their contract is to insert an “effective date” into the contract and to specify that it is the date for purposes of both the contract date and award date clauses. DynCorp suggests that such a date would be enforceable so long as it is not arbitrary. As discussed, having the effective date be the date of the contractor's proposal or the date of negotiations would appear to be sufficiently grounded in substance to warrant enforcement. However, including such a meaningful date would require communications between the parties and that is not possible in sealed-bid procurements or in some negotiated contracts.

[Emphasis added.}

We think that the FAR is deficient in several areas. First, there is no reason that clauses should use differing language. Our first recommendation would be to use the same language for all clauses and that would be the contract date. Second, the FAR should address the effective date issue. As several of the cases we discussed indicate, there can be a significant time period between submission of proposals and negotiation on one part and acceptance on the other. Changes in statutes or regulations can have a significant impact on the risks assumed by the parties. Merely having an “effective date” block in SF 26 and Optional Form 307 is not sufficient. Procurement personnel should be advised why, and under what circumstances, an effective date should be inserted. After all, the purpose of having a contract is allocation of risk."

Emphasis added.

Cautious inquiry advised.

Link to comment
Share on other sites

1 hour ago, Vern Edwards said:

Emphasis added. That might be Retread's case.]]

Yes it was.  As I recall, the contractor regularly billed the government using the cost principles in effect on the effective date shown on the contract document and the government reimbursed the contractor without question.  It was only after the contract was signed did the government question which cost principles applied.  The court based its decision on what it perceived to be the intent of the parties. 

Link to comment
Share on other sites

3 hours ago, Retreadfed said:

Yes it was.  As I recall, the contractor regularly billed the government using the cost principles in effect on the effective date shown on the contract document and the government reimbursed the contractor without question.  It was only after the contract was signed did the government question which cost principles applied.  The court based its decision on what it perceived to be the intent of the parties. 

Is this the case you’re referring to?

http://www.cofc.uscourts.gov/sites/default/files/opinions/MILLER.DynacorpInfoSys.pdf

Link to comment
Share on other sites

Then it’s important to mutually agree to an “effective date” for the new task order…

From the latest explanation by the OP, they apparently want the contractor to do predatory planning before the start of the level of effort work.

Link to comment
Share on other sites

3 hours ago, Vern Edwards said:

According to Cibnic and Nash, "Merely having an 'effective date' block in SF 26 and Optional Form 307 is not sufficient."

So I want to back up on this thought and your very helpful additional information.  Offered as thoughts for all not just you Vern so I hope you take my comments as intended.  Just further thoughts about the matter of effective date.

With it now stated that the matter relates to a Task Order under a multiple award IDIQ I think consideration, maybe paramount consideration, should be give to the terms and conditions of the parent IDIQ.   I may be getting too far into the weeds but I pulled up the most current conformed copy of the parent IDIQ solicitation which I think represents the awarded parent contract that the original poster is anticipating award of the Task Order under.  thoughts that in truth may not present an issue but all the same here are some facts from the parent solicitation that again I think represents an awarded IDIQ that the original poster is dealing with.  I do realize in making my comments that the contractor for award is also the incumbant of a previous task order.

--In the terms and considitions I found six references to effective date.  None seem to help address the issues of this thread, most especailly the funding part.

--Lots of mentions of this or that at "award".

--How about this statement as compared to any use of award or effective date - "Sponsorship can begin as soon as the Task Order Contracting Office has determined the contract awardee."

-- Neither here nor there regarding this instant matter I just found this an interesting limitation on use of the IDIQ's when it sounds like in this particular case going through the motions of Task Order competition is just that, motion.   "There is no direct ordering or sole source."

-- What started me on my quest after the OP's detail regarding a Task Order is the mention of "protest".  I do backstep on my concerns in part but then I found the discussion in the parent solicitatin/contract regarding omsbudsman interesting. 

--  That is enough on my part except to note that the following regarding FAR clauses in the parent -  FAR 52.229-4(No),  FAR 52.216-7 (Yes) with this interesting reference "Payment request. The Contractor shall ensure a payment request includes documentation appropriate to the type of payment request in accordance with the payment clause, contract financing clause, or Federal Acquisition Regulation 52.216-7, Allowable Cost and Payment, as applicable."

Offered again not to indicate anything what so ever right or wrong just that  "inquisitively cautious" should include the terms and conditions of the parent contract as there may or may not be something in it that helps sort out anything that may be considered an effective date or the like.  

Reference - N0017824R7000_RFP_Conformed Copy_04_23_2024.pdf

Link to comment
Share on other sites

2 hours ago, C Culham said:

Offered again not to indicate anything what so ever right or wrong just that  "inquisitively cautious" should include the terms and conditions of the parent contract as there may or may not be something in it that helps sort out anything that may be considered an effective date or the like.

@C Culham Carl, I agree with that.

 

 
Link to comment
Share on other sites

On 6/19/2024 at 10:08 AM, ji20874 said:

To answer your question:  Will FAR 1.102(d) work for you?

Some posters here did not approve of my comment above, but I see no problem with it.  If anyone would read the FAR text, they would see that use of FAR 1.102(d) as "authority" requires some effort -- it only fits if the approach in question evidences "sound business judgment" and "is in the best interests of the Government."  It takes some professional thinking to arrive at conclusions in these matters, and I hope the OP is able and willing to apply some professional thinking to his or her question.  I see nothing in this thread suggesting that OP has read the cited FAR text.

Link to comment
Share on other sites

1 hour ago, ji20874 said:

Some posters here did not approve of my comment above, but I see no problem with it.  If anyone would read the FAR text, they would see that use of FAR 1.102(d) as "authority" requires some effort -- it only fits if the approach in question evidences "sound business judgment" and "is in the best interests of the Government."  It takes some professional thinking to arrive at conclusions in these matters, and I hope the OP is able and willing to apply some professional thinking to his or her question.  I see nothing in this thread suggesting that OP has read the cited FAR text.

I think all of the above is true. I did not approve of the comment, and said so.

I did not approve of the comment because most people do not read FAR text as deeply as they should or have the education and experience needed to interpret and apply it.

FAR 1.102(d) says:

Quote

The role of each member of the Acquisition Team is to exercise personal initiative and sound business judgment in providing the best value product or service to meet the customer’s needs. In exercising initiative, Government members of the Acquisition Team may assume if a specific strategy, practice, policy or procedure is in the best interests of the Government and is not addressed in the FAR, nor prohibited by law (statute or case law), Executive order or other regulation, that the strategy, practice, policy or procedure is a permissible exercise of authority.

Nice-sounding words. But a self-proclaimed "junior contract specialist" (and many senior contract specialists) have no idea how to apply FAR 1.102(d). They do not yet have the organizational resources or the personal skills needed to research strategies, practices, policies, and procedures and the mass of "case law" that has been applied to them. They would not come here seeking "insights" and "guidance" if they did.

There will soon be published in The Nash & Cibinic Report a 6,300+ word essay by a Federal judge that lays out the issues concerning determination of who is an "interested party" under the Tucker Act. A junior contract specialist who reads it, even one with a law degree, will learn how difficult it is to sort out procurement strategies, practices, policies, and procedures. I have all the organizational tools and personal skills that anyone could ask for in this business and 50 years of experience from GS-05 to GS-15, which include many years as a teacher, researcher, and writer, and I can't always do it. I had to read the judge's draft several times.

FAR 1.102(d) was written by people who wanted to sound encouraging. I have cited it many times. But the truth is that citing it in response to a request for insight and guidance from a self-proclaimed junior contract specialist, who did not ask a clear question and did not provide essential context, and leaving it at that is an act of futility and dismissal. And so is saying that delving into a matter more deeply is only making things more complicated.

Things are complicated, very complicated. Which is why they must be delved into. Deeply.

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


×
×
  • Create New...