Withholding for labor under T&M contracts

At one time, the T&M payments clause required withholding of $50,000 relating to the cost of labor hours under such contracts. I have a recollection that there was an ASBCA (?) decision holding that the withholding only applied at the contract level and not the task order level under IDIQ contracts. Unfortunately, the only mechanism I have for doing research on ASBCA decisions is the service provided by GWU. The search engine has been removed from that site. Does anyone have any information on this decision that my somewhat erratic memory says exists?

Thanks.

I cannot find an ASBCA decision, but I did find the following in the July 27, 2005 Federal Register dealing with FAR Case 2004-003:

Quote

Task Order Versus Entire Contract

2. Comment: A respondent stated that the proposed rule is unclear

as to whether the $50,000 ceiling on withholding applies to an

individual task or to an entire contract. It recommended the proposed

rule be clarified to identify the basis for application of the ceiling.

The respondent added that it had previously recommended in an audit

report that the $50,000 ceiling be applied to each order where orders

are closed separately. The respondent's recommendation is based on the

belief that the clarification will assist contracting officers in

performing their jobs.

Councils' response: The Councils agree that it would assist both

contractors and the Government if the proposed rule were clarified as

to whether the withhold ceiling applies to an entire contract or to

individual orders. Such a clarification would reduce any possible

confusion by either party as to the applicability of the ceiling and

thus remove the potential for disagreements. The Councils agree that

the withhold ceiling applies to the entire contract. Therefore, the

Councils have revised the guidance at FAR 32.111(a)(7)(iii) and the

clause at FAR 52.232-7(a)(2) to clarify that the withhold ceiling

applies to the total contract.

Unquote

The source is here: http://regulations.justia.com/view/18937/.

The current clause provides for withholding in paragraph (a)(7), which says that the total amount withheld "for the contract" shall not exceed $50,000.

I cannot find an ASBCA decision, but I did find the following in the July 27, 2005 Federal Register dealing with FAR Case 2004-003:

Quote

Task Order Versus Entire Contract

2. Comment: A respondent stated that the proposed rule is unclear

as to whether the $50,000 ceiling on withholding applies to an

individual task or to an entire contract. It recommended the proposed

rule be clarified to identify the basis for application of the ceiling.

The respondent added that it had previously recommended in an audit

report that the $50,000 ceiling be applied to each order where orders

are closed separately. The respondent's recommendation is based on the

belief that the clarification will assist contracting officers in

performing their jobs.

Councils' response: The Councils agree that it would assist both

contractors and the Government if the proposed rule were clarified as

to whether the withhold ceiling applies to an entire contract or to

individual orders. Such a clarification would reduce any possible

confusion by either party as to the applicability of the ceiling and

thus remove the potential for disagreements. The Councils agree that

the withhold ceiling applies to the entire contract. Therefore, the

Councils have revised the guidance at FAR 32.111(a)(7)(iii) and the

clause at FAR 52.232-7(a)(2) to clarify that the withhold ceiling

applies to the total contract.

Unquote

The source is here: http://regulations.justia.com/view/18937/.

Thanks. I was aware of this language from the FR. However, my memory was that there was a decision to the same effect that predated this change. They say as we age, memory is the second thing to go. I forgot what the first is.

Thanks. I was aware of this language from the FR. However, my memory was that there was a decision to the same effect that predated this change. They say as we age, memory is the second thing to go. I forgot what the first is.

Retread, given the language of the clause, why do you need the ASBCA decision? By the way, I did a quick search and could not find any such decision.