Procurement and Contract Law
Procurement Law Overview, Part Two
Payments under Fixed-Price Construction Contract clause permits the government to partially compensate contractors for supply and services which have been accepted by the Government, as long as the contractor demand it and the sum is no less than $1,000 or 50% of the full contract amount. These interim payments diminish the contractor needs to finance expenses to fulfill the contract. As permitted by the Contracting Officer, the government will reimburse the contractor, the amount that is specified in the contract as the work continues, or as decided by the Contracting Officer. An itemized list must be required to identify how much total funds are requested, what the funds have been able to accomplish in this contract, which subcontractors have been paid, and the work they have perform so far. It also needs to include any other pertinent information that the Contracting Officer requires. Preparation costs and deliveries prior to the labor begin can be taken into consideration by the Contracting Officer, as long as the contractor provides acceptable proof that the items are at hand and will be used in for this contract. It is mandatory for every request for payments; the contractor will certify that the totals requested are to cover costs acknowledged in the contract. Once is certified and is discovered that there is a failure to conform to the conditions of the contract, the Contracting Officer must be informed of the deficiency; and be the contractor is obligated to reimburse the government until it has been fixed. I encountered this clause when I submitted a contract request to upgrade our unit conference room with videoconferencing capabilities. The small business contractor required a stipulation in the contract, for immediate repayments within 30 days for the total amount of all audio/video equipment and delivery charges. As soon as the last item was received, I had to immediately certify to the Contracting Officer that all items were on hand, for the Defense Financial Accounting Service (DFAS) to release the funds towards the contractor. It was great concern on the timeline, since most of the equipment was arriving during holiday schedule, which was difficult to forecast an accurate timeline to compensate the contractor. At the end I was told by the Contracting Officer that the government had to compensate the contractor with additional funds, since it took 60 days to release the partial payment. The government’s penalty was to cover for the additional financing charges the contractor had to endure.
The Government Delay of Work Clause can be included when a fixed-price contract is considered for services, or for commercial supplies and /or modified-commercial items. This clause reassures the contractor that if the Contracting Officer fails to include or imply any agreement under the contract of any future delays or interruptions, or fails to act within the time specified or within a realistic time if not specified; an amendment shall be made for any rise in the cost of performance caused by the delay or interruption. The contract shall be improved in writing to include any delivery or performance dates, and any other prescribed period or condition affected by the delay or interruption. However, no modification shall be made under this clause for any delay or interruption by any other cause; or to an attempt to increase profit; and in particular a delay due to the fault or negligence of the contractor. This is actually enforced when the government request for the contractor to begin work immediately and fails to ensure that all the contractor’s requirements to begin the work are not met in a timely fashion. Some of the government delays I’ve witness in my career in the Army Logistic Field when working collaborating with contractors are: delayed access for contractors to freely...