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    Can a contractor add in fees and profit into their REA when the reason for the delay is government based -- note delay was not caused by CO or contracting -- there has already been a 6-month extension granted and now REA is being negotiated. Question is, does contracting have a basis to deny fees and profit for the REA and have backup through the FAR?


    There are a couple areas you could look for more guidance on allowable costs/fees etc. when in an REA situation.

    FAR Subpart 43.2 Change Orders.  Specifically, 43.205 Contract Clauses, discusses based on contract type and what is being procured and the appropriate clause that would be included in the contract.  Again, these clauses also include what the Contracting Officer would be required to make an equitable adjustment for. 

    For Example: If contract is Cost Reimbursable, FAR 52.243-2(b) states, If any such change causes an increase or decrease in the estimated cost of, or the time required for, performance of any part of the work under this contract, whether or not changed by the order, or otherwise affects any other terms and conditions of this contract, the Contracting Officer shall make an equitable adjustment in the-

               (1) Estimated cost, delivery or completion schedule, or both;

               (2) Amount of any fixed fee; and

               (3) Other affected terms and shall modify the contract accordingly

     52.243-1 Changes-Fixed-Price.

    As prescribed in 43.205(a)(1), insert the following clause. The 30-day period may be varied according to agency procedures.

    Changes-Fixed Price (Aug 1987)

          (a) The Contracting Officer may at any time, by written order, and without notice to the sureties, if any, make changes within the general scope of this contract in any one or more of the following:

               (1) Drawings, designs, or specifications when the supplies to be furnished are to be specially manufactured for the Government in accordance with the drawings, designs, or specifications.

               (2) Method of shipment or packing.

               (3) Place of delivery.

          (b) If any such change causes an increase or decrease in the cost of, or the time required for, performance of any part of the work under this contract, whether or not changed by the order, the Contracting Officer shall make an equitable adjustment in the contract price, the delivery schedule, or both, and shall modify the contract.

    For the Government Delay of Work, FAR Subpart 42.13 discusses situations that may occur during contract performance that cause the Government to order a suspension of work, or a work stoppage. Depending on the contract type and what is being procured, there are clauses the contracting officer would include in the contract.  The clauses specifically state what the contracting officer would be required to make equitable adjustments to.

    Specifically, 42.1304-Government Delay of Work.  In this section, it discusses the clause at 52.242-17.  This, however, wouldn’t be applicable if the contract otherwise specifically provides for an equitable adjustment because of the delay or interruption, e.g., when the changes clause is applicable.  I have included the clause below.  This is for FFP contract for supplies other than commercial or modified commercial products.

    52.242-17 Government Delay of Work.

    As prescribed in 42.1305(c), insert the following clause:

    Government Delay of Work (Apr 1984)

          (a) If the performance of all or any part of the work of this contract is delayed or interrupted (1)by an act of the Contracting Officer in the administration of this contract that is not expressly or impliedly authorized by this contract, or (2)by a failure of the Contracting Officer to act within the time specified in this contract, or within a reasonable time if not specified, an adjustment (excluding profit) shall be made for any increase in the cost of performance of this contract caused by the delay or interruption and the contract shall be modified in writing accordingly. Adjustment shall also be made in the delivery or performance dates and any other contractual term or condition affected by the delay or interruption. However, no adjustment shall be made under this clause for any delay or interruption to the extent that performance would have been delayed or interrupted by any other cause, including the fault or negligence of the Contractor, or for which an adjustment is provided or excluded under any other term or condition of this contract.

          (b) A claim under this clause shall not be allowed-

               (1) For any costs incurred more than 20 days before the Contractor shall have notified the Contracting Officer in writing of the act or failure to act involved; and

               (2) Unless the claim, in an amount stated, is asserted in writing as soon as practicable after the termination of the delay or interruption, but not later than the day of final payment under the contract.

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