The U.S. government, and the Department of Defense in particular, has spent millions of dollars on OCONUS construction projects and will continue to do so. Contracts were awarded for the construction of complete facilities in Djibouti, Africa, troop barracks in Afghanistan and runways in Qatar. Not surprisingly, there is no shortage of bidders for these projects – with their millions of dollars in revenue. Many major U.S. government contractors, as well as foreign construction companies, have repeatedly requested these projects. Since all these construction projects are based on far, the tenders are essentially similar and contain identical clauses and provisions, although the specifications are of course different. A clause that is systematically included in all the respective tenders and that causes great anxiety to many contractors is far 52.236-1, execution of the work by the contractor. Essentially, this clause requires the contractor to perform a certain percentage of the work, typically between 15 and 20 per cent. While contractors may not find this percentage too heavy for projects in the U.S., they may struggle to meet the percentage required for the OCONUS project. Compliance Verification: The Contractor and its representative are responsible for verifying the Contractor`s compliance with this clause.
Of course, the CO and the DBA must necessarily rely heavily on the contractor`s various advancement plans to perform a percentage analysis. While an agency wants to ensure that a contractor is able to meet the percentage requirement before awarding the contract, it is clear that whether a contractor meets the percentage requirement is a matter of liability that is determined during the performance of the contract. (1) The contractor must perform a certain percentage of the contract work; (2) The contractor must carry out the work on the construction site itself; As required by paragraph 36.501(b), insert the following section: [Complete the section by inserting the appropriate percentage corresponding to the complexity and scope of the work and the usual or required special subcontracting (see 36,501(a)].] The contractor must perform work on the site and in its own organization that corresponds to at least ____ [add the corresponding number in words followed by numbers in parentheses] percentage of the total amount of work to be performed under the contract. This percentage may be reduced by an addendum to this contract if the contractor requests a reduction during the performance of the work and the contractor determines that the reduction would be in favour of the government. In Luther Construction Company, Inc., B-241719, January 28, 1991, 1991 CPD ¶ 76, GAO ruled against the agency, where the agency rejected the protester`s offer as not meeting the non-compliance with the clause`s percentage requirement. Maintaining the protest, gao noted that the question of whether a contractor can meet the percentage requirement is a matter of responsibility and not a question of responsiveness of an offer. (See also Iber & Sons, Inc., B-208365.2, April 20, 1983, 1983 CPD ¶ 424). Remedies: The clause itself does not contain any specific remedy for breach. (e.B. the contractor is not required to return the funds if he does not reach the required percentages). Theoretically, and as attempted in the above decision, a breach could serve as the basis for default termination.
However, such a drastic measure would require concluding that the contractor`s current account shows that the contractor does not meet the percentage requirement. In addition to non-termination, a CO could certainly reflect the contractor`s inability to meet a contractual requirement in its previous performance assessment. 3) The contractor must carry out the work with his own organization. Background: Essentially, this clause was intended to prevent a contractor from bidding only on behalf and executing an order without adding value. This prevents a contractor from reaping the profits and recognition of the work when in reality the subcontractors do all the work. Thus, the clause ensures that the Prime is significantly involved in the project and is actually on the project site. The clause gives the contract agent broad discretion to determine the percentage corresponding to the complexity of the work and the special subcontractors required, but the percentage should not normally be less than 12 per cent. .