Partial T4C or Change IAW 52.212-4(c)?
In your scenario, you raised several good points, so let’s examine each of them and their applicability:
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1. We could have a lengthy discussion on when a change is a scope issue that would trigger the competition requirements under the Competition in Contracting Act (CICA) but I do not believe this is at issue here.
2. The Changes Clause 52.243- 1 Changes Fixed Price , Alt 1 applies to non-commercial contracts and is not applicable to your scenario, but worth addressing to determine what can be done under a Changes clause. Changes are specifically limited under a FFP services contract to changes as indicated in paragraph a. Paragraph a.(1) is not hugely illuminating in description but a change in the specification or scope of work which results in a decrease in the price is usually treated as a deductive change to the services to be performed i.e. the description or services to be performed, so meeting the intent of (a) (1) below. But that type of change is not the same as a strict quantity deduction or reduction in the units/hours to be delivered which does not fit neatly into the Changes clause under paragraph a.(1).
Alternate I (Apr 1984). If the requirement is for services, other than architect-engineer or other professional services, and no supplies are to be furnished, substitute the following paragraph (a) for paragraph (a) of the basic clause:
(a) The Contracting Officer may at any time, by written order, and without notice to the sureties, if any, make changes within the general scope of this contract in any one or more of the following:
(1) Description of services to be performed.
(2) Time of performance (i.e., hours of the day, days of the week, etc.).
(3) Place of performance of the services.
3. Your contract includes 52.212-4 which under paragraph c, gives you much greater latitude than 52.243-1 by not defining the allowable changes per se, as long as the changes are made bilaterally. Your contractual change could therefore theoretically be covered by paragraph (c) as long as it is done bilaterally:
“(c) Changes. Changes in the terms and conditions of this contract may be made only by written agreement of the parties.”
4. 52.212-4, paragraph (l) gives you the opportunity to terminate part of the contract as a termination for convenience, which would be a unilateral modification.
(l) Termination for the Government’s convenience. The Government reserves the right to terminate this contract, or any part hereof, for its sole convenience…
5. So now we are left with 1) do we do it bilaterally under 52.212-4 (c) or unilaterally under paragraph (l). Part 12 does not give any additional illumination on what changes can be made to the contract nor does it address additive or deductive changes. So we can infer that this could be a deductive change and in your case could be done under paragraph (c) as long as the contractor agrees to it as a bilateral change to the contract. Part 12 does however address terminations under FAR 12.403 (below) and directs the use of FAR 12.403 rather than Part 49.
12.403 -- Termination. (a) General. The clause at 52.212-4 permits the Government to terminate a contract for commercial items either for the convenience of the Government or for cause. However, the paragraphs in 52.212-4 entitled “Termination for the Government’s Convenience” and “Termination for Cause” contain concepts which differ from those contained in the termination clauses prescribed in Part 49. Consequently, the requirements of Part 49 do not apply when terminating contracts for commercial items and contracting officers shall follow the procedures in this section. Contracting officers may continue to use Part 49 as guidance to the extent that Part 49 does not conflict with this section and the language of the termination paragraphs in 52.212-4.
(b) Policy. The contracting officer should exercise the Government’s right to terminate a contract for commercial items either for convenience or for cause only when such a termination would be in the best interests of the Government.
The stipulation for issuing a partial termination for convenience therefore under FAR 12.403(b) is that such a termination must be in the best interests of the Government. So I would assume this is your situation and therefore you could process this as a unilateral partial termination and not need to have the agreement of the contractor, although you both will have to agree on the termination settlement FAR 12.403 (d)(2).
6. So we are back to either paragraph (c) or (l) could be used. Unfortunately when we look to case law there is not much illumination there to give you definitive direction. The boards and courts have not really established when it is more appropriate to use the Changes vs. Termination clauses.
[t]he question of whether work should be deleted under the Changes or the Termination clause is best left to the circumstances of each case and where the parties proceeded by means of a deductive change we will not alter that treatment absent a compelling reason. (Goetz Demolition Company, ASBCA No. 39129, 13 August 1990.
You are therefore in my opinion going to have to decide for yourself (with legal’s assistance) whether paragraph (c) or (l) is the better fit, but given the facts as presented, neither would be wrong.