The contractor will not sign a modification deobligating funds for the excessive leave that has been taken. We are at an impasse. Do I have authority to do an unilateral mod to recover the funds for the hours we are not getting? I have heard throughout my career that unilateral mods can be done, but I have never done one, and there are conflicting ideas within my work group.
This response is based on the information provided. We suggest you discuss with your contracting officer and/or legal department as appropriate.
Your scenario generates many questions. The first key questions is that you state, "The contractor maintains that the labor CLIN is a firm fixed price." We are going to assume the CLIN is firm fixed-price (FFP). If it is FFP, the issue becomes much more complex. You must determine what the PWS/task order contemplated to be accomplished. Was the task to provide 1920 hours or was it to supply engineers? If it was to provide hours, you have a legitimate argument. If it was to provide engineers, then the failure to perform is more ambiguous. If the task was to provide engineers, then the government must argue the work provided did not meet PWS requirements. The apparent degradation will need to be shown (so if you have not been documenting, do so now).
As contracting officer, you have the authority to issue a unilateral modification, but you must follow certain procedures and take certain steps in doing so. You will want to review FAR subpart 33.2.
f negotiating a result is no longer possible you may issue a unilateral contracting officer's decision. You will need to document your decision as outlined in FAR 33.211 and copied below.
The contractor may then choose to appeal your decision.
"FAR 33.201 -- Definitions.
As used in this subpart--
“Issue in controversy” means a material disagreement between the Government and the contractor that--
(1) May result in a claim or
(2) Is all or part of an existing claim"
A claim is defined in the Disputes clause.
"52.233-1 -- Disputes.
(c) “Claim,” as used in this clause, means a written demand or written assertion by one of the contracting parties seeking, as a matter of right, the payment of money in a sum certain, the adjustment or interpretation of contract terms, or other relief arising under or relating to this contract. However, a written demand or written assertion by the Contractor seeking the payment of money exceeding $100,000 is not a claim under 41 U.S.C. chapter 71 until certified. A voucher, invoice, or other routine request for payment that is not in dispute when submitted is not a claim under 41 U.S.C. chapter 71. The submission may be converted to a claim under 41 U.S.C. chapter 71, by complying with the submission and certification requirements of this clause, if it is disputed either as to liability or amount or is not acted upon in a reasonable time."
"FAR 33.210 -- Contracting Officers Authority.
Except as provided in this section, contracting officers are authorized, within any specific limitations of their warrants, to decide or resolve all claims arising under or relating to a contract subject to the Disputes statute. In accordance with agency policies and 33.214, contracting officers are authorized to use ADR procedures to resolve claims. The authority to decide or resolve claims does not extend to --
(a) A claim or dispute for penalties or forfeitures prescribed by statute or regulation that another Federal agency is specifically authorized to administer, settle, or determine; or
(b) The settlement, compromise, payment, or adjustment of any claim involving fraud."
"FAR 33.204 -- Policy.
The Government’s policy is to try to resolve all contractual issues in controversy by mutual agreement at the contracting officer’s level. Reasonable efforts should be made to resolve controversies prior to the submission of a claim. Agencies are encouraged to use ADR procedures to the maximum extent practicable. Certain factors, however, may make the use of ADR inappropriate (see 5 U.S.C. 572(b)). Except for arbitration conducted pursuant to the Administrative Dispute Resolution Act (ADRA), (5 U.S.C. 571, et seq.), agencies have authority which is separate from that provided by the ADRA to use ADR procedures to resolve issues in controversy. Agencies may also elect to proceed under the authority and requirements of the ADRA."
"FAR 33.211 -- Contracting Officers Decision.
(a) When a claim by or against a contractor cannot be satisfied or settled by mutual agreement and a decision on the claim is necessary, the contracting officer shall—
(1) Review the facts pertinent to the claim;
(2) Secure assistance from legal and other advisors;
(3) Coordinate with the contract administration office or contracting office, as appropriate; and
(4) Prepare a written decision that shall include—
(i) A description of the claim or dispute;
(ii) A reference to the pertinent contract terms;
(iii) A statement of the factual areas of agreement and disagreement;
(iv) A statement of the contracting officer’s decision, with supporting rationale;
(v) Paragraphs substantially as follows:
'This is the final decision of the Contracting Officer. You may appeal this decision to the agency board of contract appeals. If you decide to appeal, you must, within 90 days from the date you receive this decision, mail or otherwise furnish written notice to the agency board of contract appeals and provide a copy to the Contracting Officer from whose decision this appeal is taken. The notice shall indicate that an appeal is intended, reference this decision, and identify the contract by number.
With regard to appeals to the agency board of contract appeals, you may, solely at your election, proceed under the board’s—
(1) Small claim procedure for claims of $50,000 or less or, in the case of a small business concern (as defined in the Small Business Act and regulations under that Act), $150,000 or less; or
(2) Accelerated procedure for claims of $100,000 or less.
Instead of appealing to the agency board of contract appeals, you may bring an action directly in the United States Court of Federal Claims (except as provided in 41 U.S.C. 7102(d), regarding Maritime Contracts) within 12 months of the date you receive this decision'; and
(vi) Demand for payment prepared in accordance with 32.604 and 32.605 in all cases where the decision results in a finding that the contractor is indebted to the Government.
(b) The contracting officer shall furnish a copy of the decision to the contractor by certified mail, return receipt requested, or by any other method that provides evidence of receipt. This requirement shall apply to decisions on claims initiated by or against the contractor.
(c) The contracting officer shall issue the decision within the following statutory time limitations:
(1) For claims of $100,000 or less, 60 days after receiving a written request from the contractor that a decision be rendered within that period, or within a reasonable time after receipt of the claim if the contractor does not make such a request.
(2) For claims over $100,000, 60 days after receiving a certified claim; provided, however, that if a decision will not be issued within 60 days, the contracting officer shall notify the contractor, within that period, of the time within which a decision will be issued.
(d) The contracting officer shall issue a decision within a reasonable time, taking into account --
(1) The size and complexity of the claim;
(2) The adequacy of the contractor’s supporting data; and
(3) Any other relevant factors.
(e) The contracting officer shall have no obligation to render a final decision on any claim exceeding $100,000 which contains a defective certification, if within 60 days after receipt of the claim, the contracting officer notifies the contractor, in writing, of the reasons why any attempted certification was found to be defective.
(f) In the event of undue delay by the contracting officer in rendering a decision on a claim, the contractor may request the tribunal concerned to direct the contracting officer to issue a decision in a specified time period determined by the tribunal.
(g) Any failure of the contracting officer to issue a decision within the required time periods will be deemed a decision by the contracting officer denying the claim and will authorize the contractor to file an appeal or suit on the claim.
(h) The amount determined payable under the decision, less any portion already paid, should be paid, if otherwise proper, without awaiting contractor action concerning appeal. Such payment shall be without prejudice to the rights of either party."
"FAR 33.212 -- Contracting Officers Duties Upon Appeal.
To the extent permitted by any agency procedures controlling contacts with agency BCA personnel, the contracting officer shall provide data, documentation, information, and support as may be required by the agency BCA for use on a pending appeal from the contracting officer’s decision."
"FAR 33.213 -- Obligation to Continue Performance.
(a) In general, before passage of the Disputes statute, the obligation to continue performance applied only to claims arising under a contract. However, the Disputes statute at 41 U.S.C. 7103(g), authorizes agencies to require a contractor to continue contract performance in accordance with the contracting officer’s decision pending a final resolution of any claim arising under, or relating to, the contract. (A claim arising under a contract is a claim that can be resolved under a contract clause, other than the clause at 52.233-1 Disputes, that provides for the relief sought by the claimant; however, relief for such claim can also be sought under the clause at 52.233-1. A claim relating to a contract is a claim that cannot be resolved under a contract clause other than the clause at 52.233-1.) This distinction is recognized by the clause with its Alternate I (see 33.215).
(b) In all contracts that include the clause at 52.233-1, Disputes, with its Alternate I, in the event of a dispute not arising under, but relating to, the contract, the contracting officer shall consider providing, through appropriate agency procedures, financing of the continued performance; provided, that the Government’s interest is properly secured."
The first step is to be clear on what it is that has been contracted for, a number of hours or engineering bodies. If it was hours, your right to deobligate or withhold payment (whichever is appropriate depending on where you are in the performance of the effort) should be straightforward. If it was bodies, it is much less clear the government has a right to reduce the FFP payment.
We suggest you ask your lawyer to do a Westlaw or Lexus/Nexus search for case law that may support your intent.
If all are agreed, you would notify the contractor of the Air Force's intent to deobligate moneys from the CLIN related to the effort in question.
Create the modification and send it for signature. If the contractor refuses to sign, sign and issue and then let to process
work through the disputes/appeal process.