Blog - Archive for August 2011
Posted on Tuesday, August 30, 2011 8:25:28 PM
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Posted on Thursday, August 25, 2011 2:30:31 PM
Lately, we’ve noticed several contractors were surprised to find out their contracts contain FAR Part 12 Commercial Item clauses. In fact, in one case, commercial item clauses were improperly used in a construction contract. So, check your contract to see if it contains any of the clauses set forth in FAR Subpart 12.3. If so, here is what to expect.
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Posted on Wednesday, August 24, 2011 2:21:41 PM
In times of fiscal austerity, we usually see an increase in terminations for convenience. The government has an almost unfettered right to terminate a contract for its convenience. Only in very rare cases has a termination been treated by a judicial tribunal as a breach of contract. These cases involve bad faith attempts to just get the contract switched to another contractor. In some cases we’ve also seen the termination rules abused by contracting officials who terminate for default when they should terminate for convenience. The remedy in such a case is conversion to a termination for convenience.
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Posted on Tuesday, August 23, 2011 2:45:24 PM
Posted on Tuesday, August 23, 2011 2:42:45 PM
Posted on Tuesday, August 23, 2011 1:23:45 PM
Posted on Thursday, August 18, 2011 6:24:57 PM
Most disputes involve contract interpretation. One side thinks something means one thing and the other thinks it means something else. What does the contract say?
A judicial tribunal will start by examining the plain language of the contract, reading its terms together to give reasonable meaning to all parts of the contract. The tribunal will not allow extrinsic evidence (evidence outside the contract such as witness testimony, documents, etc.) to be introduced on the issue unless the language is ambiguous. Ambiguous is defined as capable of two (or more) reasonable interpretations. If the contract is not ambiguous, meaning there is only one reasonable interpretation, there will be no testimony and no documents allowed in evidence to help interpret the meaning.
Since most disputes arise over interpretations, I must repeat my admonition that you thoroughly and carefully scour the solicitation and contract documents for possible ambiguities BEFORE you bid.
If you miss something and become entangled in the thicket of "what does it mean", read the language carefully, in the context of the entire contract. Try to discern the plain meaning first. If you are hopelessly entwined in differing possible reasonable interpretations, apply the rules of resolving ambiguities, which start with extrinsic evidence of meaning and end with resolving ambiguities against the drafter of the language.
Posted on Wednesday, August 17, 2011 7:10:09 PM
The standard FAR Disputes, Changes and Termination clauses are not mandatory subcontract flow down clauses. In fact, it is improper to flow down the standard FAR Disputes clause. Here is a model subcontract Disputes clause:
Posted on Thursday, August 11, 2011 5:52:39 PM
Don’t be the blind leading the blind. Chances are your newly minted contracting officer does not know what an REA or a claim is supposed to look like—what is must contain. There is no form in FAR, no outline, not even a discussion of what goes in this type of document. That’s a bit odd, in my view.
Posted on Thursday, August 11, 2011 4:42:40 PM
What do Requests for Equitable Adjustment (REA’s) and muscle cars have in common? Both are kind of dying out, slowly but surely.
Posted on Tuesday, August 9, 2011 5:31:46 PM
I just reported in a CIB on a proposed FAR regulation which addresses documenting contractor performance evaluations. The proposed regulation (comments are due by September 8, 2011) provides that agency evaluations of contractor performance, including both negative and positive information, must be provided the contractor "as soon as practicable" after completion. Contractors are given 30 days to submit comments, rebutting statements or additional information to the agency. Agencies then kick the package to a level higher than the contracting officer for the final agency decision. The evaluation file may then be used in source selection decisions.
This seems more than a little unfair in the case of negative evaluations. It's a little like the fox guarding the hen house. Sure, it's too time consuming and expensive to provide for complete judicial review of disputed performance evaluations. But it does seem as though a bit more due process is in order when so much is at stake. It's a little like getting negative points on your driver's license without the opportunity to contest the ticket. We need at the very least a traffic court judge to take a look at these negative performance evaluations.
So, our comment on the regulation is this: please, let's appoint an impartial contracting person outside the accusing agency to pass judgment on negative performance evaluation disputes. I treat this as one of the many things we need to do to encourage more participation in the industrial manufacturing and services base for government contracts. Competition will be enhanced if we just introduce a little more fairness and impartiality into the procurement process.
Posted on Sunday, August 7, 2011 1:21:28 AM
As I stated in writing about the "Big Five" government duties, there is an implied obligation in every government contract that the government cooperate with the contractor and not interfere in its performance. This all started in 1876 with a pronoucement from the U.S. Supreme Court. In the 20th Century, the doctrine evolved to require the government to do whatever was reasonably necessary to assist the contractor to perform and included the duty to communicate with the contractor and disclose information vital to the contractor's performance.
The government can violate the duty to cooperate and not interfere without acting in bad faith or with the intention of harming the contractor. In fact, to sustain a claim for breach of these duties, the contractor need not prove bad faith.
These duties are read into the contract as a matter of law. They are just as binding as if they were stated expressly in the contract terms and conditions.
Unhappily, contracting officers often seem unaware of these legally required duties. Although, in my opinion, the relationship is not a partnership and the system of procurement laws and regulations creates an adversarial atomosphere, there is no excuse for foot dragging, stonewalling, failure to be responsive, ignoring pleas for assistance, turning down ADR and insourcing through bait and switch to name but a few breaches of these duties. When the government enters the marketplace, it is required to follow the rules. After all, it made the rules in the first place.
Posted on Saturday, August 6, 2011 1:01:39 PM
Just how do you get the government to the table? FAR 33.214 does not require the parties to conduct ADR. But it does require the contracting officer to answer your request stating the reasons for denial which are somewhat limited. The new DFARS (and we hope a new FAR clause) should help (See In Praise of Mediation below). We certainly need strong government acquisition leadership to make ADR work.
But my favorite form of ADR is what DFARS calls "structured unassisted negotiation". What is that and how does it work? It is not in DFARS or FAR. See www.spriggsconsultingservices.com/resolve_disputes.shtml.
If that does not work, get your case to the ASBCA or CBCA as quickly as possible. File your notice of appeal from the contracting officer's decision (or deemed denial), file your complaint and ask for a settlement judge. You cannot formally without making it a joint request. However, you can ask for a status conference during which you politely invite the judge's assistance in getting the parties to the table. I assure you, the judges at these Boards love to encourage negotiated settlements.
Posted on Saturday, August 6, 2011 11:51:15 AM
Just what all does it take to win a bid protest? Generally, two things: 1) a winning argument based on solid facts; and 2) an outside consultant to ferret out those facts.
Specifically, what kind of arguments win protests? Let's get rid of the losing arguments first. If you are dead set on arguing the source selection official's best value determination was a bad judgment call, you lose. If you absolutely must argue bias and prejudice, you lose. In these instances, I will not help you.
So let me list the winning arguments:
The first argument depends upon a thorough analysis of the solicitation documents including, in particular, the statement of work and the evaluation factors. If they are ambiguous, go to the contracting officer pronto. If he or she stonewalls you, protest.
The other arguments depend on what actually shows up in the agency record. How do you see the complete agency record? You must hire an outside consultant. You will not be allowed to see the record, but your consultant can. (I can explain.)
How do you protest without seeing the record? How could you lose without the source selection official failing to apply an evaluation factor, changing the factors, introducing a new one or applying them unequally?
Posted on Saturday, August 6, 2011 10:35:17 AM
The interrelationship of the changes and terminations clauses in government contracts and subcontracts is so important I feel the need to reiterate what I said in CIB No. 5 below.
If you face termination for default or you have been terminated for convenience, you must also consider the implications of the changes clause. Every compensable change is an excusable cause of delay or failure to perform. Thus, if you are given a cure notice or show cause notice, look to whether you have compensable changes. They are defenses to the threatened T for D. And, if you are terminated for default, your appeal should include your changes claim. It also is important to file immediately a pro forma termination for convenience settlement proposal including changes claims to set the stage for negotiation of a settlement of the T for D.
If you are terminated for convenience, part 49 of FAR requires the contracting officer to consider all changes claims. You will need the changes clause to justify a price increase if your total T for C proposal exceeds the original contract price. You also will need changes as a vehicle to argue against the application of the adjustment for loss formula, should the government choose to assert the contract was in a loss position.
How do you identify changes? A good starting point is in our blog on the big five implied obligations in every contract.
All of these principles apply with equal force and effect to subcontracts under government prime contracts if the subcontracts contain flowdown changes and termination clauses.