Trust But Verify - Your CO Is Not All Knowing

The Federal Acquisition Regulation (FAR) is comprised of 37 Chapters and over 2000 pages. Contracting Officers (with unlimited warrants) are the most highly trained, but there isn’t a person alive who is an expert on the FAR and Case Law. And a Contracting Officer is a human being with his/her own perspective, strengths and flaws.

Therefore, when it comes to government contracting - especially contract administration – you should trust but verify the CO responses. Just because a CO tells you something, that doesn’t mean it’s true!?

Here’s an example of a payment issue that I solved for a client.

A CO rejected a contractor’s equitable adjustment request under FAR?52.222-43?Fair Labor Standards Act and Service Contract Labor Standards-Price Adjustment (Multiple Year and Option Contracts) because the contractor had submitted the invoice past the 30 days cited in the clause. The contractor thought that meant that the final authoritative answer was indeed “no payment for you”

And in this case, it seemed plausible. Afterall, the clause states that…?The contract price, contract unit price labor rates, or fixed hourly labor rates will be adjusted to reflect the Contractor’s actual increase or decrease in applicable wages and fringe benefits to the extent that the increase is made to comply with or the decrease is voluntarily made by the Contractor as a result of and…The Contractor shall notify the Contracting Officer of any increase claimed under this clause within 30 days after receiving a new wage determination unless this notification period is extended in writing by the Contracting Officer.”

But – I noted that the option modification(s)?did not include?a timeliness provision, and I know from experience that it must include this provision. I then found the applicable case law:

...In absence of express language warning that the contractor will lose rights for late submission, the Government would only be able to strictly enforce the notice provision if it can demonstrate that it was prejudiced by the delay.?See?Riggs Nat’l Bank of Washington, DC v. Gen. Servs. Admin.,GSBCA 14061, 97-1 BCA ? 28,920;Air Masters Corp.?v. Gen. Servs. Admin., GSBCA No. 16237, 04-2 BCA § 32,688.?The Government must demonstrate any prejudice related the contractor’s late submission. InAir Masters, the GSBCA found that the Government had not demonstrated prejudice for an untimely submission that was nearly one year late.?See Air Masters Corp.?v. Gen. Servs. Admin., GSBCA No. 16237, 04-2 BCA § 32,688.?Where the contract modification has not yet been implemented and any alleged delay just served as an interest free loan to the Government, it is unlikely that?Government could demonstrate any prejudice....

?...The case law has made it abundantly clear that the FAR price adjustment clause 30 day notice requirement is not interpreted strictly and that the Government can only use untimely notice under this FAR provision as an absolute defense if it can show some prejudice, or has set forth some contract timeliness provision explicitly to the contrary. And any such special contract provision, to the extent it varies the standard FAR clause, arguably requires an approved FAR deviation to be operative. The FAR clause itself only requires notice in 30 days. As a general rule, that FAR provision isn’t interpreted strictly to work a forfeiture on the contractor..

Therefore, I drafted an email to the CO with the case law and requested payment in the amount due.??

Trust but verify.??Government contracting is complicated – don’t allow a CO to negatively impact your financial well being or deny your company contractual rights. Just because the CO takes an action – it doesn’t make it the right action or only course of action/remedy.

I love solving complex contract administration, payment and closeout issues. If you need help, let me know.