FFP-LOE Contract but no work to do

Do you have a "variation in quanity" clause in your contract? If so, what does it say?

No, there isn't a "variation in quantity" clause.

here_2_help said:

Do you have a "variation in quanity" clause in your contract? If so, what does it say?

No, there isn't a "variation in quantity" clause anywhere.

mrahel,

Does your contract contain the following language:

Quote

In accordance with FAR 16.207-2, entitlement to full payment is based on the determination by the Government that the required level of effort and reports have been provided and are acceptable.

No, that doesn’t appear either.

Funding Profile
(a) The total amount of funds allotted to this Subcontract and available for payment will be specified in individual 
written Orders issued hereunder. Order’s SOWs shall set forth specific task requirements to be performed, 
Level of Effort to be delivered (if an LOE order) and shall specify a funding ceiling that shall not be exceeded. 
The Subcontractor shall only perform work as directed in written Orders SOW and no work effort is authorized 
hereunder except pursuant to a written Order issued by Contracts Representative. Subcontractor is 
directed to the specific funding notice requirements contained in FAR Clause 52.232-20 and 52.232-22 
incorporated herein. 
(b) For all Level of Effort Orders, it is contemplated that the funding and level of effort provided for each 
individual Order will be sufficient for the work required to be performed by that Order SOW, for the 
performance period specified in the Order. Order funding and level of effort may be increased from time to time 
by issuance of a written Order Modification signed by Contracts Representative; however, until and 
unless such Modification is issued by [redacted], the established not-to-exceed funding and level of effort ceiling 
shall apply irrespective of any other provisions of this Subcontract and any work or costs incurred in excess 
thereof shall be at Subcontractor’s sole risk and expense.
(c) The total funding for the work under this Subcontract will be determined as the sum of all individual Orders. 
[redacted] liability is expressly limited to the amounts stated in each Order. 
B.6 Level of Effort (LOE)
(a) The Subcontractor agrees to provide the total LOE specified in each Order in performance of the work 
described herein. 
(b) The estimated composition of the total LOE will be provided in each Order separately.
(c) It is understood and agreed that the hours per month may fluctuate in pursuit of the technical objective, 
provided such fluctuation does not result in the exhaustion of the total hours of effort prior to the expiration of 
the Subcontract’s period of performance. If, during the period of performance, the Subcontractor finds it 
necessary to accelerate the expenditure of direct labor to such an extent that the total hours of effort specified 
above will be exhausted prior to the expiration of the term, the Subcontractor shall notify in writing 
setting forth the acceleration required, the probable benefits which would result, and the cost impact, if any, of 
such a change in the rate at which direct labor hours are expended. The Subcontractor shall not accelerate any 
effort until receipt of such written approval by designated Contracts Representative.

mrahel said:

What are my next steps, if any?

Based on your latest post, do nothing until you’re in receipt of an Order.

You can do nothing or, if you think it's warranted, you can assert that your prime is in breach of your contract for failing to provide you with promised work.

So what will this mean for the contract if I do nothing though? And would I get paid?

mrahel said:

So what will this mean for the contract if I do nothing though? And would I get paid?

I don't think you will get paid if you don't receive any orders and don't do any work.

So what is the point of the contract then? I have no recourse? I thought I was going to get work.

Barring anymore information, your subcontract is written like an agreement as the prime has complete control of whether you get work or not as it will issue you orders when they need you. Review your contract to see if you had a minimum guarantee LOE order in the contract, follow Matthew's guidance and call your prime to see if they would give you some information. I would suspect they will say they havent received that type of work yet.

MV2009 said:

Barring anymore information, your subcontract is written like an agreement as the prime has complete control of whether you get work or not as it will issue you orders when they need you. Review your contract to see if you had a minimum guarantee LOE order in the contract, follow Matthew's guidance and call your prime to see if they would give you some information. I would suspect they will say they havent received that type of work yet.

Thanks, that’s what I figured was the case.

mrahel, is there something in the subcontract that indicates it is a requirements subcontract?  From what you have posted, that seems to be the case.  If so, the prime does not have an obligation to issue you any orders.  However, the prime would have been required to give you a reasonable estimate of the work to be done.  If this estimate is not realistic or based on information that is accessible to the prime, as H2H indicated, the prime may have mislead you into entering into the contract and you would have a claim against the prime.

On the other hand, if the contract is not a requirements contract, what is the prime's obligation to issue you orders?  Further, what consideration supports the subcontract?  Surprising as it may seem, more than one prime contractor has issued a task order subcontract without providing any consideration to the sub.

Retreadfed said:

mrahel, is there something in the subcontract that indicates it is a requirements subcontract?  From what you have posted, that seems to be the case.  If so, the prime does not have an obligation to issue you any orders.  However, the prime would have been required to give you a reasonable estimate of the work to be done.  If this estimate is not realistic or based on information that is accessible to the prime, as H2H indicated, the prime may have mislead you into entering into the contract and you would have a claim against the prime.

On the other hand, if the contract is not a requirements contract, what is the prime's obligation to issue you orders?  Further, what consideration supports the subcontract?  Surprising as it may seem, more than one prime contractor has issued a task order subcontract without providing any consideration to the sub.

B.1 Subcontract Type
The Subcontract awarded hereunder is a Single Award Subcontract with Fixed-Price/Levelof-Effort 
(FP/LOE) basis upon issuance of Purchase Orders (“POs” or “Orders”) by designated Contracts 
Representative in accordance with the ordering procedures stated below.
Under this Agreement, Subcontractor is responsible for using its best efforts to deliver the technical 
requirements, within the time (delivery schedule) agreed upon, and within the negotiated estimated cost, 
Level of Effort subject to the Limitation of Cost provision or, if applicable, the Limitation of Funds 
provision of this Subcontract. 
B.2 Statement of Requirements
This Subcontract constitutes the type of subcontract whereby the Seller, shall, in accordance with the Terms 
and Conditions of this Subcontract and the Statement of Work (SOW) set forth in Section J, provide the 
necessary personnel and do all things necessary and/or incidental to the furnishing and delivery of 
the supplies and/or services in accordance with the specifications and other requirements applicable thereto 
and referenced herein. 
No work shall commence without the issuance of written authorization from Contract 
Administrator. Under no circumstances shall [redacted] be liable for any costs incurred by the Seller in excess 
of the authorized funding limitation.

This clause refers to an agreement instead of a contract.  What this means is not clear.  However, you have provided nothing to show that the prime has any obligation to issue you any orders or the magnitude of orders that may be issued.  Further, this does not address the question of consideration.  It is quite likely that you do not have a contract at all, but something in the nature of a basic ordering agreement.

Retreadfed said:

This clause refers to an agreement instead of a contract.  What this means is not clear.  However, you have provided nothing to show that the prime has any obligation to issue you any orders or the magnitude of orders that may be issued.  Further, this does not address the question of consideration.  It is quite likely that you do not have a contract at all, but something in the nature of a basic ordering agreement.

There is nothing in the contract about obligations nor anything about consideration. There is a PWS/SOW that describes the tasks that will be completed but that is all.