Actually, they were bit smoother than that. Not much. though. And when you removed the pretty words, it meant the same thing.
From what you've said, it's pretty darn hard to get around it. If it's a cost-plus contract, the FAR requires that it's cost-plus. The FAR requires that all work done in performance of the contract must be recorded [accounted]. So it would be a violation of the FAR if you did not account for that time, did the work on uncompensated overtime or set up a charge number for that work that was not charged to the contract. That's a direct FAR violation.
Superficially, you could beat the accounting nuances of the FAR, if the government did a fixed-price amendment to the cost plus contract. [I think that's legimate, but you would have to verify that with a contracts specialist.] But if the DCAA determined that the fixed price amendment was directed by the government as a means of covering an out-of-scope activity, the DCAA should [and most likely would] direct the government to amend the amendment to a cost-plus under the terms of the original contract and direct you to bill the government for the effort.
This is not a point of "principal"; in all likelihood, your company is exposing itself to a violation of the FAR. I think it's important that your company not legally expose itself. Beyond that I consider it a business decision.
If the effort is more than half way completed the government is most likely bluffing [even if they don't know it]. It's a bit embarassing to terminate a contract half completed, zip to show for it. Terminating the contract because the government didn't know how to spec the RFP is more than an awkward admission. If the contract is 2/3 complete an agressive contracts/accounting group should be able to generate enough termination costs [legitimately] such that you'll end up with ~90% of the funded contract. If you're close to 3/4 complete getting termination costs for the remainder should be a breeze. Which would be even more embarassing for the gov program manager.
But there's the fuzzy "business decision" to make. How important is this client and/or this work? Can you afford to lose this contract and this client. While it would again be illegal for the client to ban you from further procurements, it's been done.
The money is going to start flowing out of DoD pretty soon. You can bet that every SETA contractor worth his salt has already added tasks to help their government client figure out how to spend the money that's about to flow. There's going to be sole source and fast-track competitive procurements coming out the kazoo.
Skipping the nice-nice FAR language, those SOBs are practicing extortion.
jttmab |
