How does one address this situation? Where do you document that this happened? Are there any legal actions that need to be taken? The next contract for this Utility service is to be a sole source award to the same contractor for a 10-year period of performance (est. value of $3M). What should be done in the meantime while the new contract is going through the review process? Since it is a Utility service for the entire base, stopping the work would be catastrophic...
Good day to you!
Open full Question Details
Based on what you have provided (i.e. the utilities service contract already expired but the contractor continued to provide services/invoice and the requirements owner/resource advisor continued to ensure payment....plus...a few months passed by before the contract administrator realized that the contract expired), this is my response:
Q1-How does one address this situation/where do you document that this happened?
Answer: Given the following assumptions (this was a direct contract let by a DoD agency to a utilities service provider…not from a GSA Areawide public utilities contract or from an existing Interagency Agreement), the best advice I can give you is to review FAR Part 41 guidelines and its DFARS/agency supplements. Specifically review FAR Subpart 41.202 which deals with procedures of obtaining utility services and what you need to document in the file (i.e. establishing a utility history file like a copy of applicable rate schedule, invoice records and its payments, a memo-for-record explaining what specifically happen in your given situation, etc. to support for utility services rendered without a formal contract). Even though this FAR provision deals with utility services providers who explicitly refuse to sign the contract but the government still needs the service from that service provider who holds a monopoly in a given geographical region (I know this is not the case with your contractor), this is the closest process you have given your situation. Seek further assistance from the Public Utilities Specialist under GSA Energy Division whenever practicable (http://www.gsa.gov/portal/category/21093) as they may have seen similar situation you’re experiencing given their extensive knowledge in this field.
Q2-Are there any legal actions that need to be taken?
Answer: Your question is a little vague so I'm assuming that you want to know if there are any legal liability coming from the requirements owner (customer) or resource advices who ensures payments to the contract after the contract expires. Depending on all of the facts, this is a situation that could be defined as an unauthorized commitment (UC), which is an agreement that is not binding solely because the government representative who made it lacked the authority to enter into that agreement on behalf of the government. In order to fix an UC the government must choose to ratify it. See FAR 1.602-3 and your agency supplement to determine your actual ratification process. Bear in mind that us Contracting folks are also responsible to know the expiration date of our own contracts and should have inform the customer in advance in order to plan for a follow-on acquisition accordingly. At the end....whether you organization pursue or not pursue a ratification process doesn't specifically address the heart of your specific question which is below.
Q3-What should be done in the meantime while the new contract is going through the review process?
Answer: Refer to my answer on Question 1. I don’t think it’s feasible nor wise to stop the work since this will definitely affect the security of the entire base and materially affects its operational mission. Plausible actions your organization can do in the meantime is to either 1) let a short-term bridge purchase order within the lowest possible clearance approval dollar threshold with enough performance period to cover the follow-on award (depending on your agency procedures IAW AFFARS Subpart 5301.90) or 2) follow the procedures under FAR Subpart 41.202 as closest as possible. If you research further on GSA Energy Department's procedures, procuring utility services w/o a formal contract is one of four methods of procurement for this specific type of services. Again, seek additional assistance from the GSA Public Utilities Specialist listed on the above website.
Best of luck….now get your contracting organization, legal, as well as GSA involved!