Stop Using Terms Like “Dead” When Referring to Contracts
Well They Certainly Aren't Alive! Zombie Contracts Maybe?
In reference to my last article, This Week in Dudek-Enabled Social Security Administration Screwups: Terminated Contracts Edition (Updated Mar 8, 2025). Reddit user u/Sensitive-Excuse1695 commented:
Stop using terms like “dead” when referring to contracts…
…contracts can’t “die.” COs have wide latitude to do what is in the Government’s best interest.
So maybe I should call them “Zombie contracts?”
Some background context here. The Social Security Administration (SSA) issued a termination for convenience on Contract 28321324P00050184 The State of Maine’s Department of Health and Human Services under which the State of Maine was able to submit social security card applications requested by parents at the time of birth. Termination of this contract meant that parents could no longer request the cards at the hospital, but would have to drive with their newborn to one of the eight social security field offices located across the state.
As expected, stuff hit the fan when this hit the news and the Maine Congressional delegation cried foul 9especially as from everything seen in the context this was a political punishment directed by the White House. In the heat of the moment, the SA administrator said, “My Bad. Mistakes happen. We will reinstate the contract.”
I wrote my concerns that this could not be done legally without doing a entire new contract action because when the SSA modified the contract, they set the end date for February 28, 2025. This mean the contract was “dead” and could not be “revived.”
Hence the comment from u/Sensitive-Excuse1695 above.
I tried to respond directly to the comment on Reddit, and it could not post. So I am posting it here and will link to it from there.
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”No, "Dead" is "Dead" especially in this case as the facts as we know them say so, and the Termination section of the FAR confuses things, especially how this contract is reported in FPDS. Legally, you cannot breathe life back into them.
The contracting office was instructed to terminate this contract. To do so, the Contracting Officer had to meet the requirements of FAR 49.102(a):
General. The contracting officer shall terminate contracts for convenience or default only by a written notice to the contractor (see 49.601). The notice of termination may be expedited by means of electronic communication capable of providing confirmation of receipt by the contractor. (Emphasis added). When the notice is mailed, it shall be sent by certified mail, return receipt requested. When the contracting office arranges for hand delivery of the notice, a written acknowledgment shall be obtained from the contractor.
Given the (suspicious) timing of this termination, it appears possible that in lieu of sending a formal letter to the Contractor, they interpreted "The notice of termination may be expedited by means of electronic communication capable of providing confirmation of receipt by the contractor" as meaning they could issue it via a bilateral contract modification. But FPDS-NG does not indicate if it was a bilateral or unilateral modification.
What we DO know from FPDS-NG is that the termination modification (P00001) changed the end date of the Contract from June 28, 2025 to February 28, 2025:
As soon as that modification was signed, this contract for severable services was "dead" on February 28, 2025.
And to me, this is where things get convoluted and crazy and confusing:
-- The FPDS-NG report states that this was a sole-source award under FAR 6.302-1(b)(1)
-- The FPDS-NG report also states that the award used "Commercial Products and Services Acquisition Procedures", but did not use "Simplified Procedures for certain Commercial Products and Commercial Services". If they truly did it as a commercial services award, then the likely included FAR 52.212-4 Contract Terms and Conditions—Commercial Products and Commercial Services which includes:
"(l)Termination for the Government’s convenience. The Government reserves the right to terminate this contract, or any part hereof, for its sole convenience. In the event of such termination, the Contractor shall immediately stop all work hereunder and shall immediately cause any and all of its suppliers and subcontractors to cease work. Subject to the terms of this contract, the Contractor shall be paid a percentage of the contract price reflecting the percentage of the work performed prior to the notice of termination, plus reasonable charges the Contractor can demonstrate to the satisfaction of the Government using its standard record keeping system, have resulted from the termination. The Contractor shall not be required to comply with the cost accounting standards or contract cost principles for this purpose. This paragraph does not give the Government any right to audit the Contractor’s records. The Contractor shall not be paid for any work performed or costs incurred which reasonably could have been avoided."
This is very different than the T for C clauses at FAR 52.249-XXXX.
Notwithstanding, FAR 49.106(d) would, on its face, give you the "get out of jail free card" that gives the KO wide discretion that you describe:
(d) Reinstatement of terminated contracts. Upon written consent of the contractor, the contracting office may reinstate the terminated portion of a contract in whole or in part by amending the notice of termination (emphasis added) if it has been determined in writing that-
(1) Circumstances clearly indicate a requirement for the terminated items; and
(2) Reinstatement is advantageous to the Government.
But my challenge here (and please, greater minds than me feel free to chime in/discuss/debate) is that this says the contract may be reinstated by amending the notice of termination. This language seems to assume that the notice of termination was issued as a written letter/notice that would be settled with the final termination settlement modification executed via an SF-30 modification that would formally change the end date of the contract (this keeping the contract "alive" until the full termination pro.
The we have what happened here - a termination modification issued that actually changed the period of performance and "killed" the contract. What mental and written gymnastics does a KO have to go through to resuscitate the "dead" contract?
A related thought to this is that the major driver behind lawyers saying you cannot breathe life back into a contract is the competition rules under CICA.
Well that would not apply here because there is no other entity other than a state agency that can provide this data (theoretically), so circumventing competition is not really an issue here. The question for OGC: If CICA is not an issue here, why can't I breathe life into a dead contract if all I am going to do is issue a new contract to the same entity and that would be a huge waste of time and effort?
Links:
"Government Cannot Extend a Contract After It Expires" by Richard Lieberman, Public Contracting Insitute:
https://publiccontractinginstitute.com/government-cannot-extend-a-contract-after-it-expires
Comp Gen Case B-219136 Washington National Arena Limited Partnership (See pages 3 and 4)
https://www.gao.gov/assets/b-219136.pdf
Discussion over on WIFCON (where Vern Edwards is on your side for the most part)
https://www.wifcon.com/discussion/index.php?/topic/4182-missed-option-but-have-a-ja/”