Scope, Switches, and a Late Claim
A $2,600,000 firm-fixed-price contract requires a contractor to install a security camera network at 12 sites and to provide associated network configuration services necessary for a fully operational system. Mid-performance the government discovers that the sites need new network switches that were not listed in the statement of work but are physically required to connect the cameras. The contracting officer issues a unilateral modification directing the contractor to furnish and install 40 switches, estimated at $95,000, and states that the work is within the general scope. The contractor objects that switches are new work, refuses to order them until price is agreed, and separately submits a claim for a three-week delay caused by the government's late granting of site access, filed 45 days after the delay ended.
1. Is the switch work within the scope of the contract, and what difference does the answer make to how the contracting officer may proceed?
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The governing test is whether the directed work is the kind of work the parties bargained for - whether a reasonable offeror in the original competition, reading the solicitation and surveying the sites, would have anticipated it. Percentage of contract price is a data point, not the test.
Facts cutting toward in-scope:
- The statement of work requires associated network configuration services necessary for a fully operational system; switches are the physical prerequisite to connectivity.
- A reasonable offeror surveying 12 sites would have identified the connectivity gap and priced it.
- $95,000 is about 3.7 percent of the contract value, a modest increment.
Facts cutting toward out-of-scope:
- Supplying hardware is a different performance obligation from installing cameras and configuring networks, and vendors who do not sell switches might have bid differently.
If in scope, the contracting officer may direct performance unilaterally under the Changes clause, obtain a proposal, and determine a unilateral price if no agreement is reached; the contractor's remedy is a claim, not refusal. If out of scope, the direction is a cardinal change and the contracting officer may not order it unilaterally - the path is a supplemental agreement or a separate competitive procurement. The contracting officer must make and document that scope determination now, not after performance.
2. Must the contractor proceed with the disputed switch work? What are the risks on each side, and how should the contracting officer respond to the refusal?
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Yes, in the first instance. The Changes clause carries a duty to proceed: the contractor must continue performance diligently as directed and resolve price afterward through its proposal and, if necessary, a claim. Stopping work to force a negotiation exposes the contractor to a default termination, reprocurement costs, and delay damages, and it deprives the contractor of the equitable adjustment machinery it wants to use.
The narrow exception is a cardinal change - a direction so far outside the contract that it is a breach rather than a change. Even then, a contractor that unilaterally stops work takes a serious risk; the safer course is performance under written protest with rights expressly reserved, or a declaratory judgment action. The refusal here looks tactical, since the contractor's own position (new work, new price) is compatible with performing under protest.
The contracting officer should:
- respond in writing, restating the direction and the duty to proceed;
- remind the contractor that the disagreement is resolved through the proposal and claim process, and that refusal risks default;
- set a firm date for the proposal and a schedule for negotiation; and
- if the contracting officer concludes the work really is out of scope, rescind or convert the direction promptly rather than leaving an unlawful unilateral order in place.
3. The delay claim arrived 45 days after the delay ended. How should the contracting officer handle it?
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Timeliness is a real issue but not automatically fatal, and the contracting officer should not deny on the calendar alone without analysis.
- Notice requirements. If the delay arises from a suspension, delay, or interruption attributable to the government, the applicable suspension-of-work clause requires the contractor to assert its right to an adjustment within 30 days after the delay ends. Forty-five days is late on its face. Under the Changes clause, a proposal is likewise due within a short, stated period after direction.
- Effect of late notice. Short notice requirements exist to let the government investigate, mitigate, and preserve evidence. The contracting officer should determine whether the 15-day delay in notice actually prejudiced the government's ability to do that. If it did not, treating the notice as satisfied is defensible; if the site records have gone cold or mitigation was lost, a denial on timeliness is stronger and better supported.
- Separate hard limits. The claim must state a sum certain and be certified above the statutory threshold, and it must be submitted within the six-year Contract Disputes Act period. The 30-day clause requirement does not extend that outer limit, and missing the outer limit is a true bar.
Practical handling: request the certification and a sum-certain quantum, analyze causation and concurrent delay, evaluate the 15-day gap for prejudice, and issue a written decision that addresses both the timeliness point and the merits rather than resting on one.