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  • Question

    I work closeouts in our office and every year we inherit the list of contracts that have cancelling funds that we work. It never fails that there ware a handful of small companies that just failed to perform in some way. We are well outside the period of performance so T4D doesn't seem to be an option. We definitely can't issue a cure notice and a show cause is supposed to be issured immediately after contract ended. A Unilaterial Price determination doesn't seem appropriate because we have no data from previous years to go by. Can the contracting officer determine that the contract price is $0 and demand the government's money back as a scare tactic to at least get the contractor to comply? What is the best way to handle these "old dogs" and what is our authority?


    Answer

    This CPFF contract should have included the clause at FAR 52.216-7 Allowable Cost and Payment (DEC 2002) and FAR 52.216-8 Fixed Fee (MAR 1997), the clauses which were in effect at the time of the contract in question.  FAR 52.216-7 specifically outlines what is required of the contractor before payment can be made.  Paragraph (d)(2)(i) of the clause states that the contractor SHALL (emphasis added) submit an adequate final indirect cost rate proposal to the contracting Officer and the cognizant auditor within the 6 month period following the expiration of each of its fiscal years.  It goes on to say that the proposal shall include adequate supporting data. 

    You do not specifically address whether the contract exceeded one fiscal year.
    Paragraph (d)(5) of the clause states that once this report is submitted, the contractor shall submit a final completion invoice or voucher.  If he fails to do so, in accordance with paragraph (d)(6) of the clause, the Contracting officer may determine the amounts due and record this determination in a unilateral modification to the contract.  This determination constitutes the final decision of the Contracting Officer in accordance with the Disputes clause. 

    The clause also allows audit at any time before final payment.  If payments made exceed the amount determined unilaterally by the contracting Officer, a demand for payment should be issued to the contractor IAW
    FAR Subpart 32.604.  Your options are to make a unilateral determination if the contractor has failed to provide a final voucher, or assuming final payment has not been made, you can request that DCAA perform an audit.  The clause is your authority to act. 

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