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  • Question

    Should the A/E firm be held to base year pricing for Type B design even though no work was accomplished in IDIQ base year nor was a Notice to Proceed issued due to Government delay?


    Answer

    The changes clause that governs this contract is FAR 52.243-1 (Alt III) -- Changes -- Fixed-Price.  This clause provides the contracting officer the right “to make changes within the general scope of this contract in the services to be performed.”  If changes are made paragraph (b) of this clause states the following:

    If any such change causes an increase or decrease in the cost of, or the time required for, performance of any part of the work under this contract, whether or not changed by the order, the Contracting Officer shall make an equitable adjustment in the contract price, the delivery schedule, or both, and shall modify the contract.


    You originally negotiated a FFP delivery ordered.  However, the government has changed the work and when it is to be performed.  The contractor is well within his rights to request and equitable adjustment.  Since the government has delayed the period of performance into the next FY, it only seems logical and fair that the contractor could charge the reasonable increase for inflation and the Service Contract Labor Standards (where applicable).  The fact that you already have prenegotiated labor and overhead rates for that FY16 only makes your negotiations go much quicker. 

    Bottom line – you cannot hold your contractor to the original FFP or to the rates of the previous year when it is the government whom is changing the terms and period of performance.

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