Section 27-2425. LETTER CONTRACTS

 

2425.1A letter contract may be used only after the contracting officer determines, in writing, that no other type of contract is suitable.

 

2425.2A letter contract shall not commit the District to a definitive contract in excess of the funds available at the time the letter contract is executed.

 

2425.3A letter contract shall not be entered into without competition, except as provided for in chapter 17 of this title.

 

2425.4A letter contract shall not be amended to satisfy a new requirement unless the new requirement is inseparable from the existing contract. Any amendment shall be subject to the same requirements as a new letter contract.

 

2425.5The contracting officer may use a letter contract when the District's interests demand that the contractor be given a binding commitment so that work can start immediately and executing a definitive contract is not possible in sufficient time to meet the requirement. Each letter contract shall be as complete and definite as possible under the circumstances and shall include clauses approved and required by the Director.

 

2425.6When a letter contract is executed, the contracting officer shall include a price ceiling for the anticipated definitive contract. The price ceiling shall not be exceeded. Each letter contract shall also include a clause, approved by the Director, indicating the maximum liability of the District under the letter contract.

 

2425.7The maximum liability to the District shall be the estimated amount necessary to cover the contractor's requirement for funds before execution of the definitive contract. However, the District's maximum liability shall not exceed fifty percent (50%) of the overall price ceiling for the term of the definitive contract pursuant to §2425.6.

 

2425.8In procurements by other than competitive sealed bids, a letter contract shall contain a negotiated schedule for execution of the definitive contract, including dates for submission of the contractor's price proposal, cost or pricing data (if required), a date for start of negotiations, and a target date for execution of the definitive contract.

 

2425.9The contracting officer shall execute a definitive contract within one hundred and twenty (120) days after the date of execution of the letter contract or before completion of fifty percent (50%) of the work to be performed, whichever occurs first. The contracting officer may authorize an additional period if the additional period is approved in writing by the head of the contracting agency.

 

2425.10In procurements by other than competitive sealed bids, if the contracting officer and the contractor cannot negotiate a definitive contract because of failure to reach agreement regarding price or fee, the contractor shall be required to continue the work and the contracting officer may, with the approval of the head of the contracting agency, determine a reasonable price or fee, subject to review in accordance with chapter 38 and the Act.

 

2425.11Prior to execution of a letter contract, the contracting officer shall ensure that funds are encumbered for obligation in the amount of the maximum District liability for the term of the letter contract.

 

2425.12For purposes of review and approval of letter contracts, in accordance with §1010 of chapter 10 of this title, and for purposes of contracting authority, the contracting officer shall use the estimated cost of the definitive contract for determining the type and level of review and approval required.

 

source

Final Rulemaking published at 35 DCR 1567 (February 26, 1988).