FFP CONSTRUCTION CONTRACT MATERIALS

Fixed-price contract?  The title says FFP, so I'm not sure why you are asking the question.

No, the Government is not liable for increases in the price of construction materials, unless the contract provides otherwise.  If the contractor thinks it is entitled to an increase in the contract price, it should point to a contract clause that provides that entitlement.  Otherwise, reject the invoice or the request.

Is the door hardware separately priced?  I am not understanding why the contractor is submitting a SOV and quote for door hardware two-and-a-half years after contract award.  So my answer is a general answer based on general principles and what you shared in the original posting -- but I don't know what your contract says.

Agree with ji.

However, the subcontractor wasn’t required to order the door hardware in 2019. The sub could order them anytime before they are scheduled to be installed but that is the sub’s risk.

Please tell me why you would question whether or not the government is responsible for the cost increase ? Did the prime state the basis of the claim for the increased cost?

“16.202-1   Description.

A firm-fixed-price contract provides for a price that is not subject to any adjustment on the basis of the contractor's cost experience in performing the contract. This contract type places upon the contractor maximum risk and full responsibility for all costs and resulting profit or loss. It provides maximum incentive for the contractor to control costs and perform effectively and imposes a minimum administrative burden upon the contracting parties. “

This could be an issue between the prime and the sub.

Did the VA cause a delay to the schedule for door installation ?

At any rate, why is the prime asking for an increase in the price?

learningcurve said:

Should the government be responsible for the increase in cost due to the contractor's failure to order the materials in 2019?

No - If they provided a submittal and it was approved it is on them, as long as the government did not do something to prevent them from ordering the material. 

If they persist, advise them that they can submit a REA. Review it and make a fair decision (yay/nay). In the grand scheme of things, it is only a increase of 6% over the course of 2 years. Sounds like normal business to me. 

Of course if you want to be a smart alec, you could always ask them if they would have told you if it had went down by 6% and you needed to decrease the contract value.

Hello , learning curve. are you there?

The government did not cause a delay. I believe the contractor is looking for extra$$. I agree that that is between the Prime and Sub. Thanks all for your feedback.

On 6/17/2021 at 8:53 AM, learningcurve said:

The government did not cause a delay. I believe the contractor is looking for extra$$. I agree that that is between the Prime and Sub. Thanks all for your feedback.

Yes, I’ve had to deal with some primes that habitually tried to make problems between them and their subs or suppliers the government’s problem.

Absent a government caused delay, there would appear to be no responsibility for an increase in hardware cost to either the prime or the sub.

I am assuming that the purpose of the “statement of values” after award was simply a breakdown of costs for loading a progress schedule and/or for the purpose of aiding in preparation of and government evaluation of progress payment estimates as construction proceeds. Those amounts aren’t necessarily contractually binding anyway.

Joel,

I agree as the SOV are really just an estimate. Thanks for all the help.