The question is if a contract was signed , award notice issued and preconstruction informational meeting held but NO NTP, some but not all submittals submitted and approved by the COR. Can the Contractor submit a claim for delay and the loss of subcontracts that he signed with his subs to do work on this project? He will invoice for full payment of performacne and payment bonds. But second question is if this violated the Bonafide Need rule and shoudl it be terminated?
Based on the information provided, the contractor could file a claim in accordance with FAR Clause 52.242-14 as stated below. The delay is caused by an act or failure to act (within a reasonable time) on the part of the Contracting Officer. Therefore, an adjustment shall be made for any increase in the cost of performance (excluding profit)... The decision not to issue a notice to proceed is an act of the Contracting Officer that most likely "unreasonably" delayed work on the part of the contractor. The contract was awarded in October 2014 and a notice to proceed has not been issued to date, so work on the site cannot begin even though the contractor has incurred some mobilization costs and potentially material and labor costs. A determination of "reasonable or unreasonable" is situationally depend. The method I use to determine unreasonableness in this situation would be: had the Government issued the notice to proceed in October 2014, would the Government consider it reasonable if the contractor had not started work by March 2015. The government would most likely consider the contractors action or lack of action unreasonable. Therefore, the contractor can reasonably submit a claim.
Open full Question Details
As far as the question concerning the Bonafide Need Rule, the construction contract was award in October 2014 using FY 15 funds and the requirement was considered a legitimate need in 2015 or potentially a prior fiscal year but continuing into FY15. Given this information, the contract at award should meet the Bonafide Need standard since a fiscal year appropriation can be obligated for legitimate needs arising in the fiscal year the appropriation was made and in a few instances prior fiscal years. In some instances, agencies may enter into contracts in one fiscal year but the contractor does not complete the project until the next fiscal year. From the information provided, this appears to be the situation since the delaying project will not be complete until August 2015.
There are several Comp. Gen. Decision which generally state as follows: Considering that a contract was properly and legally award for a Bonafide Need, an unforeseen delay in starting work or completion of the project that extends the performance into the following fiscal year does not invalidate the award and proper obligation of funds.
I cannot determine if the delay was "unforeseen". That is a determination of the contracting officer. The decision should be coordinated effort of the customer, a fiscal law attorney and contracting.
FAR 52.242-14 -- Suspension of Work (Apr 1984)
(a) The Contracting Officer may order the Contractor, in writing, to suspend, delay, or interrupt all or any part of the work of this contract for the period of time that the Contracting Officer determines appropriate for the convenience of the Government.
(b) If the performance of all or any part of the work is, for an unreasonable period of time, suspended, delayed, or interrupted
(1) by an act of the Contracting Officer in the administration of this contract, or
(2) by the Contracting Officer’s failure to act within the time specified in this contract (or within a reasonable time if not specified), an adjustment shall be made for any increase in the cost of performance of this contract (excluding profit) necessarily caused by the unreasonable suspension, delay, or interruption, and the contract modified in writing accordingly. However, no adjustment shall be made under this clause for any suspension, delay, or interruption to the extent that performance would have been so suspended, delayed, or interrupted by any other cause, including the fault or negligence of the Contractor, or for which an equitable adjustment is provided for or excluded under any other term or condition of this contract.
(c) A claim under this clause shall not be allowed --
(1) For any costs incurred more than 20 days before the Contractor shall have notified the Contracting Officer in writing of the act or failure to act involved (but this requirement shall not apply as to a claim resulting from a suspension order); and
(2) Unless the claim, in an amount stated, is asserted in writing as soon as practicable after the termination of the suspension, delay, or interruption, but not later than the date of final payment under the contract.