Are you permitted to ask for additional discounts from a contractor during contract performance?
Started by CO4life · Apr 10, 2025 · 7 replies
- COriginal post
CO4life
Apr 10, 2025 · 1y ago
Hello Everyone,
Given the general acquisition climate and the concentration on contract value reduction through ceiling reductions and descoping, does it 1) make sense to simply ask our service contractors to propose volunteered discounts, and 2) is there anything in the regulations prohibiting just asking? I've found very little discussion on the topic other than a post from 25 years on none other than this site, /legacy/reg/566417f50cbf708d.html
and thought I'd recirculate a similar question.
Thank you!
- j
jjj
Apr 11, 2025 · 1y ago
For a starter, see FAR 8.405-4.
- C
CO4life
Apr 11, 2025 · 1y ago
jjj said:
For a starter, see FAR 8.405-4.
Thanks jjj. I should have added for open market contracts.
- j
joel hoffman
Apr 11, 2025 · 1y ago
Are you asking whether you can seek voluntary price reductions from on-going service contracts? What is the end purpose or goal to accomplish?
- C
CO4life
Apr 11, 2025 · 1y ago
joel hoffman said:
Are you asking whether you can seek voluntary price reductions from on-going service contracts? What is the end purpose or goal to accomplish?
Yes. And does it create an issue with the option periods that are remaining. The end goal is simply reduce the contract value without reducing scope. Basically, can the contractor do the same but for less.
- W
Witty_Username
Apr 11, 2025 · 1y ago
CO4life said:
And does it create an issue with the option periods that are remaining. The end goal is simply reduce the contract value without reducing scope. Basically, can the contractor do the same but for less.
It does create an issue with the option periods that are remaining. In negotiating a modification the government would potentially be giving up the options it currently owns and the contractor may or may not agree to new ones.
Additionally, a contract modification requires consideration. In this case the contractor would be giving up "value", what consideration would the government provide in return? Realistically if you want to reduce the value of the contract you should probably be willing to reduce the supplies or services you expect them to deliver in some way.
- f
formerfed
Apr 11, 2025 · 1y ago
CO4life said:
The end goal is simply reduce the contract value without reducing scope. Basically, can the contractor do the same but for less.
Edit: I apologize if my comment sounds rude but just wanted to get at your objective. The post doesn’t make sense. Why is that the end goal? Do you think the contractor gets paid too much for the work they do? Or are you afraid of what DOGE might find? Just saying the end goal is simply reducing the contract value without reducing scope isn’t a reason for the contractor to do anything.
What do you plan on giving up for the contractors concessions?
- j
joel hoffman
Apr 12, 2025 · 1y ago
CO4life said:
Yes. And does it create an issue with the option periods that are remaining. The end goal is simply reduce the contract value without reducing scope. Basically, can the contractor do the same but for less.
What I really was trying to understand is why do you want or need the contractor to reduce its prices?