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    My question is in several parts: 1) if the contractor and the Government negotiated the costs of four employees on a Firm Fixed Priced CLIN, but when the work began the contractor only provided two employees - is the Government entitled to consideration in the amount of the total labor for two employees? 2) what if the performance is ok. Not great, but ok - is the Government still entitled to consideration? 3) what if the performance is not ok - is the Government entitled to additional consideration or just the use of CPARS? 4) - (the contractor could not hire / find the other two employees) - Are they not responsible for failing to perform as they did not do what they negotiated they would do - which is provide four people? 5) I understand this is performance based - but the contractor negotiated the costs of four people. If your answer is - it is performance based and if the contractor performed then the Government should not have anything to say about it. - What then, prevents a contractor from proposing ten employees (where the Government believes they are receiving superior oversight) but then only receive two employees? Is the Government entitled to consideration? 6) Saying the Government should have used a COST CLIN is unacceptable as there is no way we would have known. trust me, if I would have known - I would have negotiated using a CPFF type CLIN. - based on all of this - is there a FAR or DFARS clause, regulation or law that speaks on this? Thank you


    Let’s start with your last question; you want to look at what inspection clause you have in your contract. It’s most likely FAR 52.212-4(a) if you are using the commercial contract format or 52.246-4 if you are using the UCF. Additional references follow below. It’s your inspection clause that explains the rights and remedies the parties have when performance does not conform to contract requirements.

    1) It depends on all of the facts. Possibly. This seems like a unique situation (“negotiated the costs of four people”) and that the government and the contractor came to an agreement it would take four people to accomplish the tasks. Hopefully your contract file and documentation of the negotiations has captured that fact. If yes, it should not be difficult to prove the contractor is at fault when they fail to staff or maintain the positions. We assume they submitted a proposal with four people, that could be enough to bring them back to the negotiation table.

    2) If you can document and prove what services rendered are not meeting contract quality requirements, your inspection clause provides the rights and remedies (as mentioned above) and certainly authorizes consideration and a whole range of remedies.

    3) Yes, of course. See answer above.

    4) Yes, if it is documented the contractor is required to provide four people. Hopefully you included this in the contract PWS or somewhere.

    5) Normally competition prevents this type of occurrence. Also a good technical evaluation and a better, more informed negotiation position.

    6) Additional guidance can be found at FAR 46.1 General [quality assurance] and FAR 46.407 Nonconforming supplies or services [government contract quality assurance]. 

    As a contracting officer/specialist, you must investigate complaints that the contractor is not performing, document your findings and act quickly, usually with a cure notice/show cause letter. Do not unilaterally short pay or reduce the contract or invoice. (Horror stories of contractor submitting catch-up invoice).  Do not ignore the problem or accept nonconforming services.  Obtain evidence of any reported failure to perform or other breaches of contract.   And collect all related facts, including the contractor's reactions to government complaints. Reports on contractor failure to perform typically relate to Anticipated or actual late delivery, failure to control costs or unsatisfactory performance.  To determine if the contractor failed to comply with contract requirements. Consider the contract language, especially the PWS, and other evidence (e.g., contractor representations regarding the deliverable). If at issue, determine whether contractor representations regarding the quality, condition, description, or performance potential of the deliverable were: part of the basis of the bargain, as documented in the price negotiation memorandum (i.e., what transpired during contract negotiations); the contractor's proposal; and the contract itself.   Pay particular attention to the RFP/Request for quote instructions.  Did a given formula calculate the monthly FFP CLIN price? (e.g., multiplying the labor rate by the number of person-hours and dividing by twelve).  Also, examine what determined the fair and reasonable price.  Specifically, the proposed, evaluated, and negotiated monthly CLIN price for four staffers would not equal the price of two staffers.  On a candid note, it is entirely possible the firm underestimated the difficulty of the requirement or underbid the price.  Not your problem. Do you think they would lower the price or provide more labor if the situation was reversed?  Some may advise that the contract be modified to reduce the requirement to two staffers, give more time to find and recruit folks, or even raise the price to allow easier recruiting.  But honestly, this only rewards destructive behaviors damages your agency's reputation, and some other dispute always arises.  Better to understand that the world of government contracting is reasonably Darwinian, and these irresponsible contractors should be driven from the field--allowed to leave quietly or terminated."

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