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  • Question

    I have inherited a problem contract. Contract was awarded to a vendor in 2014 as a minor construction MAIDIQ contract. Vendor never invoiced for minimum guarantee and I am not able to make contact. Registered mail has been returned. What authority would you recommend for de-obligation and close out? Going through termination procedures would be a mute point. For simplicity, my best guess is a simple unilateral de-obligation and just close the task order out with base award soon to follow. Vendor was only awarded the minimum guarantee task order.


    Answer

    FAR 33.206(a) gives contractors six years to submit a claim after accrual of the claim (i.e., contract performance). Thus, since the contractor has not requested payment by the end of year six, it cannot claim payment and the funds can be deobligated and the contract closed out. To demonstrate good faith you may want to send the company one more certified letter (after confirming the address), instructing it to invoice within 30 days of receipt. Document the contract file carefully. Also, consult with your activity's legal counsel for a more authoritative opinion on this legal issue.

     

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