Do you compare the subject modification to the original contract alone or the original contract and the modifications to date?

By joel hoffman on Friday, January 04, 2002 - 07:59 am:

That's a pretty broad question. Yes and no, regarding comparison of the contract and the mods to date. It depends upon the specific scope of the proposed mod. For instance, if out-of-scope work has already been added to the contract by mod, you also examine the scope of that work, if the mod would relate to its scope. If you've already "stretched" the scope of the contract, magnitude wise, you may have to be careful about a really substantial further addition. I can't make one flat statement to fully answer your question.

Can you elaborate? If you have access to Nash and Cibinic's Administration of Government Contracts, there is excellent coverage, beginning on page 382.

At any rate, one doesn't, as a general rule, simply compare the proposed mod with the original contract alone. happy sails! joel

By Dave Barnett on Friday, January 04, 2002 - 08:15 am:

I think the "reasonable person" rule comes into effect and what was the intent of the parties question comes into play. I would use the contract, as modified, in order to determine the "reasonable" interpretation on the parties intent.

By Anonymous on Friday, January 04, 2002 - 08:27 am:

Let me get this straight. The government awards modification 4 and it is beyond the original scope but nobody protested and it slipped by. Now, modification 28 is awarded and it is clear that it is beyond the scope of the original contract--without any modifications. You are telling me that modification 28 is OK because nobody caught modification 4 and it is within the scope of the contract as modified by modification 4?

By joel hoffman on Friday, January 04, 2002 - 09:21 am:

Anon, if you are asking me, I didn't tell you any such thing. Did I say anything about any out-scope mod, IMPROPERLY added to a contract?

Your problem is that you used a scattergun approach to asking your question, then expanded my qualified answer to mean something I never said.

Please restate your orignal question and clarify it as I originally requested. happy sails! joel hoffman

By joel hoffman on Friday, January 04, 2002 - 09:29 am:

Anon, for your benefit, I too, will restate my original answer:

That's a pretty broad question. Yes and no, regarding comparison of the contract and the mods to date. It depends upon the specific scope of the proposed mod.

For instance, if out-of-scope work has already been properly added to the contract by mod, you also examine the scope of that work, if the mod would relate to its scope.

If you've already "stretched" the scope of the contract (with in-scope mods which have already expanded the original scope of work or dollar value of the contract, but are still within scope)you may have to be careful about a really substantial further addition.

I can't make one flat statement to fully answer your question. Can you elaborate?

If you have access to Nash and Cibinic's Administration of Government Contracts, there is excellent coverage, beginning on page 382.

At any rate, one doesn't, as a general rule, simply compare the proposed mod with the original contract alone. happy sails! joel

By Anonymous on Thursday, January 10, 2002 - 08:35 am:

Joel,

I hate to admit it but Iread your response the same as Anon of Jan 4 did - even your restatement of your answer. Personally, I would go back to the original contract and intent and not rely on what might have been put into the contract by the one mod that "stretched" the scope. I have worked with several Army and Navy organizations that try to sometimes base "scope" on the dollar amount of the increase. Some used a 10% increase in the costs, others have had an "unoffical" policy that more than 50% increase represents "out-of-scope". I am not advocating this type of approach just pointing out that different agencies and organizations use various methods for determining scope.

By Vern Edwards on Thursday, January 10, 2002 - 09:49 am:

Anonymous and Joel:

The original question was: "Do you compare the subject modification to the original contract alone or the original contract and the modifications to date?"

Logically, prior contract modifications that were within the scope of the original contract didn't change the scope of the original contract. Thus, when deciding whether or not a proposed mod would be within the scope of the contract you consider the scope of the original contract.

If any prior modification changed the scope of the original contract and was properly justified and approved in accordance with FAR 6.303, then when deciding whether or not a proposed mod would be within the scope of the contract you should consider the scope of the contract as changed.

If any prior modification changed the scope of the original contract, but was not properly justified and approved in accordance with FAR 6.303, then when deciding whether or not a proposed mod would be within the scope of the contract you must consider the scope of the original contract.

Make sense?

While it is not uncommon for some agencies to use the relative dollar value of a proposed mod as a guide in determining whether or not it is within scope, that is not always a reliable method. See Cibinic and Nash, Administration of Government Contracts, 3d ed., pp. 386-388.

Keep in mind something that Eric Ottinger pointed out recently in another thread: some people and courts use the term "scope of the contract" rather loosely to refer to the requirement as currently specified. In that usage, all mods change the scope of the contract. Eric took the position that there is a difference between "plain" scope of the contract and "general" scope of the contract.

There is no denying that some people--including some judges--talk or write as though every change is a change in the scope of the contract. I discussed that matter with Ralph Nash after Eric brought it up and he said that judges are often careless in their use of the term. Prof. Nash did not think that there is any recognized difference between plain "scope" and "general scope." In his book, Government Contract Changes, 2d ed. (Federal Publications, Inc., 1989), p. 4-2, he wrote:

"All Changes clauses state that the Contracting Officer's authority to make changes is limited to changes that are 'within the general scope of the contract.' Considerable confusion has been caused by misuse of these words. Frequently, both contractors and Government representatives will speak of any change that results in additional costs as a 'change in scope' or as a 'scope change.' Such usage is clearly improper since it implies that the change is outside the scope of the original contract while the clause requires changes to be within the scope. From a legal viewpoint, a change outside the scope of the contract is a new procurement that the Government is not authorized to order and the contractor is not obligated to perform."

See, too, the entry for scope of the contract in The Government Contracts Reference Book, 2d ed., by Nash, Schooner and O'Brien, p. 460.

My point is that when discussing "scope" issues you have to make sure that everyone is on the same wavelength.

By joel hoffman on Thursday, January 10, 2002 - 02:02 pm:

Thanks, Vern. I agree with you.

Anon, what I was trying to say was:

1. For the original contract scope, you must be careful. If a lot of additional in-scope work has been added already, at some point, the magnitude of the modified contract with further additional work added IS one factor to consider in determining whether the added work is within scope. We once had a contract for remediation of contaminated soil at a formerly used Ammo Plant that grew, little by little from $7 million to $35 million! Each increment looked ok, when compared with the current contract scope - - but the final contract didn't resemble the "as anticipated scope at award"... We got away with that, because nobody outside the District paid any attention to the modified vs. awarded magnitude of work. We added the work to the existing contract because the State Environmental Management Board would never issue another RCRA Permit for an incinerator, plus the mob/demobilzation cost was $5 million for every separate contract. It made sense to add the work to the existing contract, even though the actual scope of dirt to be cleaned increased by 10 or 15 times the original area/volume.

2. NOW, NEW THOUGHT - NOT RELATED TO 1 ABOVE - DON"T MIX THE TWO. Out-of-scope work can be added to the contract for convenience, by means of an out-of-scope supplemental agreement, after obtaining the appropriate exemption to competition. The primary reason an out-of-scope supplemental agreement is usually added to an existing contract is for convenience - simply to save issuing a separate contract. One could optionally issue a separate contract for the work.
For subsequently proposed additional work, one must determine whether the additional, new work is within the scope of either the originally awarded contract scope or the separately added scope of work, not just the original award. Why? because you now have two scopes of work under one contract number.

That's why I said you can't simply say compare only the originally awarded scope or only compare the contract, as modified. At any rate, I still recommend that you read up on Nash and Cibinic's discussion, if you don't have any other sources.
Sorry for the confusion. happy sails! joel

By Eric Ottinger on Tuesday, January 15, 2002 - 08:32 pm:

Vern,

For continuity I have responded to your last post under the original "Fee-Bearing Costs" thread.

Eric

By bob antonio on Wednesday, January 16, 2002 - 11:30 am:

Look at the two Comptroller General decisions listed on this page.

http://www.wifcon.com/pd6_001.htm

Also, look at the Court's explanation