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  • Question

    We (The Govt) need to extend delivery date due to schedule conflicts. No dollar amount is to be affected. Contractor is agreeable to revised delivery date. Can I sign the mod?


    Answer

    Answer #1: If the government wants the later delivery date (not the contractor) executing a no-cost, bilateral modification to the contract is possible. Can this modification be executed with your SAT warrant? Review carefully your Certificate of Appointment.  FAR 1.602 requires this certificate must clearly state the scope and limitations of your authority. In addition, your agency may also have limited your warrant authority by dollar value, type of contract or actions, even to a specific subject matter, such as property disposal actions. Only by reviewing these documents can you determine which actions are within your authority.

    Answer #2:  If the contractor has schedule conflicts and has requested an extension to its fixed price contract (meaning that the contractor will not be able to meet the delivery date as specified in the contract and the government is agreeable to the delay) the answer is different. See below.

    Under this scenario, the regulations do not authorize the negotiation of a modification to extend the delivery date of a fixed price contract at no cost to the contractor.  Extending the delivery date of a fixed price contract will require consideration. A fixed price contract requires the contractor to deliver in accordance with all contract terms or risk default.  Except for an act of God or a subcontractor’s default beyond the control of the prime contractor, when a Contractor fails to deliver as specified in the contract, the Contracting Officer may terminate the contract in whole or in part, re-procure the supplies elsewhere and charge any increased price differential to the terminated contractor. See FAR subpart 16.202 and FAR 52.249-8. 

    However, a default might not be in the best interests of the government and may further delay delivery. Therefore, depending on the clauses in your contract, negotiating a delivery extension with the contractor might be an option. But not at no-cost.  By extending the delivery date, the government is decreasing the contractor’s risk and receiving less than what was required under the contract.  In this situation, consideration will be required from the Contractor. The consideration for the extension could be a reduced price, extra deliverables or another form of consideration that the Contracting Officer determines is fair and reasonable and in the best interest of the government.  [Accurately document the file on these decisions.]  

    Also note that there are risks to negotiating this modification.  Extending the delivery date after award could open up the procurement to a protest. This is a serious risk if offerors were eliminated for reasons related to schedule or delivery.  Answer this question:  “How significant is this delivery extension in relation to what was stated in the solicitation?”  If it is significant, re-procuring (rather than negotiating a modification) will reduce this risk. 

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