In a contract with CLIN-level funding and incentives, what is the appropriate application of FAR 52.216-10(c)(2) withholds? Is it appropriate to apply the reserve limits for each of the CPIF CLINs individually? If not, how would you spread the withhold to provide the maximum protection to the Government?
The FAR is silent on this issue. In searching the DFARS the following language appears at DFARS 204.70-4-1(3)(iv) you find the following language.
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“When the price for items not separately priced in included in the price of another sublime item or contract line item, it may be necessary to withhold payment on the priced subline items until all the related subline items that are not separately priced have been delivered.”
Since you do not indicate whether subline items are involved, I refer you to FAR 1.102-4(e).
“The FAR outlines procurement policies and procedures that are used by members of the Acquisition Team. If a policy or procedure, or a particular strategy or practice, is in the best interest of the Government and is not specifically addressed in the FAR, nor prohibited by law (statute or case law), Executive order or other regulation, Government members of the Team should not assume it is prohibited. Rather, absence of direction should be interpreted as permitting the Team to innovate and use sound business judgment that is otherwise consistent with law and within the limits of their authority. Contracting officers should take the lead in encouraging business process innovations and ensuring that business decisions are sound.”
This is a matter of judgement and personal preference.