Rates are crashing and fuel to the moon!

Ehh tax season and a new wagon, plus getting my old one redone to be a spare, all needs to be done but I kinda wish I could average down some of my stuff, see what happens

 

Thank you for this perspective.

We are in interesting times. We have a design/build project with the BLM that began last October.

The government pays, according to contract, within 2 weeks of submission of an approved invoice. Usually within a few days. We submitted our most recent invoice February 13th. The contracting officer has not been allowed to authorize payment. We have spoken on the phone several times, but she is not allowed to address the situation in writing other than to say she is not currently allowed to authorize payment.

At this point obviously all work has been suspended, and the timeline for completion is no longer possible as we have pursued other work to fill the allotted time for this project. I hope they will just pay us, and cancel the contract as design is nearly complete but construction has not begun. Also, I need them to release our bond to free up bonding capacity for other projects.

Trying to avoid getting political, but while I agree in general with what is happening, there are folks being impacted adversely, through no fault of their own. We will be fine, but we acted quickly to fill our schedule with other work. That said, a tool between an axe and a scalpel would have been nice, but probably take far to long to achieve results.

I guess the point behind sharing all this is just to say that the road might be bumpy for a while, but there will be plenty of opportunities.

 

I was going to ask you yesterday if you ever got this resolved, but thought it might be a little on the nosy side so I didn't. I'm sorry you are going through this, and hope it gets taken care of sooner rather than later.

 

It'll all work out and I appreciate the sentiment.

Funny thing is we have to provide a payment and performance bond to them. Looks like they should provide one to us!

I heard something on the radio yesterday about the nominee to head the BLM stepped away from it. Maybe once they get someone in there there will be better direction for all the folks that work there.

 

Well, I mean the federal government isn't really known for keeping it's word.

 

In regards to contracts they are.

 

Presuming that you understood and agreed with the purpose of the project before bidding - what is the negative cost of the project not being done? For example, in 1996 or 1997 my town voted against a VERY expensive roof replacement for the high school. During finals in 1999, it rained hard enough the roof partially failed - necessitating the replacement of the building. In short, a 50 cent washer could have prevented an $8,500 foundation repair.


Now think about the projects that have started construction and are paused. How much more is it going to cost to complete them once things get straightened out? In short - it cost Wisconsin $7 million a year in construction cone rentals over 5 years to cover a $50 million budget shortfall. To be clear - that's just the cost of the friggin barrels sitting on the road, total cost was much higher and we got a shoddy road out of it.

I will happily grant the 'sunken cost fallacy' for projects that are a waste - sometimes it's cheaper/smarter to pay the penalties than it is to complete the project. Whatever decision is made, the government is required by a Regan era law to promptly pay it's contractors and fulfill it's end of any contract. If I recall correctly, unpaid invoices automatically accrue interest at the Federal Funds Rate - call it 4% apr or .3% monthly. If the government stops paying 10% of it's contractors , we're looking at $120,000,000 monthly in interest (conservatively). Money that we're paying without getting anything in return.

You could claim the interest on your invoice. The question becomes: "should I risk further federal contracts in order to gain compensation for the money I lost?". Make no mistake - you are losing money because the Feds are holding up your bond, preventing you from doing other work. Taking this thought a step further - how many reputable construction companies are reconsidering their bids on federal contracts and is that going to open the door to companies akin to the White Volvo Mafia who will charge us more while delivering less?

Whether we're talking scalpel, bowie knife, spatha, long sword, or halberd - the issue isn't the tool or the intent. It's the precession with which it's being used. A scalpel can be used to remove limbs so the body can survive. A halberd can be used to remove a splinter. The problem we are facing is we have declared war with no vision of what victory looks like and with no regard to second order consequences.

 

In regard to to your last paragraph, you know ###### well what I meant. And what victory looks like could not possibly be more clear. Yes, there will be collateral damage, but that's life.

This is a By America Build America project, the sign that the government installed on the site also mentions President Biden and his infrastructure bill.

The project involves a bit of bank stabilization and riparian connectivity on a section of river that is sediment starved below a dam. The government typically puts out an expected price range for the scope of each solicitation. This began as $250K to $500K. There were two phases to the solicitation: Phase 1 was qualifications. The top five firms were selected to go on to the cost proposal phase, or Phase 2. Prior to submitting the bids the government changed the range from $250K at the bottom to $450K. When speaking about the project, it was mentioned that they (BLM) was tasked with spending, or at least obligating X amount of dollars before the end of the fiscal year. It was a rush to get these funds obligated, so much so that they had not yet completed the required cultural resource studies of the area in which construction would occur. Did the project have a benefit? Certainly, but only for resident habitat in a relatively remote area. The dam upstream prevents flashy high runoff events required for a stream to produce enough sediment to maintain proper riffle/run/pool sequencing and provide good fish habitat. So regardless what we did the benefit would not be tremendous other than to a small resident population of salmonids and wildlife that thrives in wetland habitats.

We were almost 100% done with the design portion, which the BLM posesses, and had yet to start on the construction portion. It will not leave a partially constructed project if they pull the plug now. The savings to the government will be about $400K if they drop it now versus completing the project, and that does not include BLM personnel salaries, vehicle expenses, and lost production on other tasks required by the department to manage the land. Yes, they will pay interest. So far that will cost them around $200. I suppose we could go after damages and lost revenue, but they will make a fair offer one way or the other.

I am happy to do the work despite my feelings about the lack of fiscal responsibity because this type of work is what we specialize in, and we provide outstanding value. Had it not been us it would have been another contractor, and we will still complete the project if the government decides to go forward with it. It just isn't going to happen within the period of performance that the solicitation and Request for Proposal (RFP) stipulated.

So, while there may be merit to your argument in some instances, how many such situations like mine are there? Furthermore, if ever both parties can manage some semblance of fiscal discipline, imagine the funds that we will have available for projects such as this.

That is all I'll say about this as further discussion cannot continue without political ideology overtaking the topic. Perhaps we have gone too far now. My apologies to the moderators, I had not intention of turning this into a political debate.

 

Evidently not.

 

You haven't. You've been focused on the subject matter at hand and facts of it, without making statements of condemnation either way. The respondent, however, hasn't avoided such references, even attempting to be veiled references. Thanks for an insight into the general issues of government contract issues that not everyone gets the chance to view or contemplate.