1) Can the Government issue a modification to reduce the quantity of the requirement using change order? Or would this be a partial termination to reduce it?
2) I saw the addition and deletion formula in CPRG but forgot how to use it. Can you provide an example on how to use the N= A - ( D - C ) formula
3) Is the contractor entitled to full amount of the contract even though the Government did not use all of the quantities that we estimated and awarded? IAW FAR 52.232-5(a) Payment of price. The Government shall pay the Contractor the contract price as provided in this contract.
4) Can the Government request a cost breakdown on the lump sum CLIN to the contractor? Or is the Government cannot request other than certified cost pricing data because the CLIN is lump sum?
1. The amount between 85 and 115% of the estimated quantity should utilize FAR 52.211-18, Variation in Estimated Quantity (which is included in the contract). If outside of that then the question because is deleted this quantity still within scope. In order to utilize this under a change order (FAR subpart 43.2), the answer must be yes. Otherwise, you would need to utilize a partial termination (FAR 49.603-2). Also, another question you must ask yourself, since it was awarded via competition, would it have affected the bid results.
2. To utilize this formula as per the CPRG, Chapter 6.1.1, the Need for Equitable Adjustments. Equitable adjustments are necessitated by some modification of the contract effort. In general, these contract modifications can be defined in one of three ways:
- Addition of work to the contract.
- Deletion of work from the contract.
- Substitution or replacement of one item of work for another (i.e., an addition with a related deletion).
This modification may come from an overt change in Government requirements or it may come from a change in the conditions surrounding the contract (e.g., differing site conditions or late delivery of Government-furnished property).
In other words, the contractor should not be left in a better or worse cost or profit position on the unchanged work after the change than it was before the change.
Here is an example of the formula:
Assume we issued a unilateral change order to delete X wall and add a new walls somewhere else. Contract has started work.
C = $50,000 = actual cost to date of work deleted
D = $100,000 = GE of deleted work
A = $100,000 = GE of added work
N = $100,000 -($100,000 - $50,000)
N = $100,000 - $50,000
N = $50,000 NOTE this is the change in COST not the value of the modification. The value of the modification is the absolute value (add the pluses and minuses) so it would be $200,000 in this example.
3. If the contract is not modified to reduce the amount, then they will be due the amount on the contract since it is a FFP and FAR 52.232-5(a). If you used estimates to award this CLIN then you would need to definitize the CLIN.
4. The Govt can request a cost breakdown but not a certified cost pricing info. The breakdown you receive may or may not be as detailed as you would like. The contractor is under no obligation to submit. The reason you would not ask for Other than Certified Cost or Pricing is you had competition.
NOTE: It is also recommended that you contact and work with your Legal Counsel and Contracting Officer.