Sign In
  • Question

    Can I unilaterally de-obligate funding without their agreement?


    Answer

    A telephone conversation with the question submitter identified a few additional facts but revealed there were no other special contract closeout authorities identified at DFARS 204.804(3) or other factors that could apply to their scenario.  So this is strictly a contract closeout issue.

    Unfortunately, there are no other FAR or DFARS contract clauses that provide the contracting officer the right to unilaterally de-obligate excess funds from a contract during a normal or quick-closeout of a CPFF contract so long as the contractor is compliant with their requirements of the clause.  Often the contractor will be reasonable and bilaterally agree to an amount to be de-obligated as excess… but that is not the case here unfortunately.

    In this instance, the contract clause that applies is FAR 52.216-7 Allowable Cost and Payment.

    52.216-7(d)(2)(i) provides the timeframe allowed for the contractor to submit their final indirect cost rate proposal.

    52.216-7(d)(3) says the “Contractor and the appropriate Government representative shall execute a written understanding setting forth the final indirect cost rates.”  But it goes on further to state “… shall not change any monetary ceiling, contract obligation, or specific cost allowance…” bold italics added for emphasis.

    The conditions at FAR 52.216-7(d)(6) would have to exist for the contracting officer to have the right to do any unilateral action.

    Open full Question Details