Government Contracts Reprocurement Contract Exceeded Government’s Authority
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Friday, March 13, 2020

Reprocurement Contract Exceeded Government’s Authority

By Government Contracts Editorial Staff

The award of a reprocurement contract following the original contractor’s default was improper because the term of the reprocurement contract was greater than the undelivered term remaining on the terminated contract. The request for quotations for communications support services contemplated the award of a fixed-price contract to be performed over a six-month base period, with two one-year option periods. When the initial awardee failed to meet various staffing requirements, the government issued a cure notice and then terminated its contract for cause. Because the government still required services, it determined reprocurement from the original competition and quotations was warranted and issued a new contract with a six-month base period and two one-year option periods to the next lowest-priced vendor. According to the protester, the government effectively conducted a new acquisition by ordering more than the undelivered services remaining on the initial awardee’s contract.

Term Too Long. In sustaining the protest, the Comptroller General explained that under FAR 49.402-6, Repurchase against contractor’s account, the government can use any acquisition method to award a contract for the undelivered portion of the original contract, as long as it observes competition to the maximum extent practicable. The government may not use this authority to award what would effectively be a new non-replacement contract. Further, under FAR 12.403(c), the government’s repurchase authority is restricted to any remedy available to a buyer in the marketplace, such as “cover” (see UCC 2-712), and the award of a reprocurement contract for more than the undelivered quantity exceeds this remedy. Here, the term of the reprocurement contract should have been for no more than 26-and-a-half months because the initial awardee performed for 3-and-a-half months before its contract was terminated. The length of the reprocurement contract improperly exceeded the length of time remaining on the original contract and allowed the government to receive an additional three-and-a-half months of performance above the level contemplated in the RFQ. The Comptroller General recommended that the government limit the length of the reprocurement contract to a term no longer than the length of performance remaining on the initial awardee’s contract. (Steel Point Solutions, LLC, 35 CGEN ¶116,702)

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