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AFG Journal

Vehicle Manufacturing Delays
February 2008
The AFG Program Office has recently received a number of inquiries from vehicle grantees regarding the current policy/position regarding delays in delivery of apparatus, its impact on the grant's period of performance, and the issuance of amendments to accommodate manufacturing delays.

The essential starting point is that we expect grantees to carry out every reasonable step to effectively complete their grant within their period of performance or as soon as possible thereafter. We have been concerned about the apparent disconnect that exists between a fire department's urgent need to replace old and/or unsafe vehicles and its willingness to wait a long period of time to obtain the new vehicle. We have, nevertheless, accepted the delays that can be experienced by vehicle awardees and allowed a reasonable amount of time to complete a vehicle.

But when a grantee is faced with unexpected and/or protracted delays, it is the responsibility of the grantee to assess all options available to them with an eye toward mitigating the adverse effect of the delays. If you are experiencing manufacturing delays in the delivery of your vehicle, we recommend that fire department leadership make a conscious and deliberate determination about the best course of action given your operational and community needs.

Clearly, there are a number of questions for which answers will be needed before options can be discussed. These include: Where is the vehicle in the production schedule? What period of time has elapsed since the order was placed? What commitments did the manufacturer make regarding a delivery date? And is the new delivery schedule is realistic?

In the end, the department's final decision should be based on the following:
  • The department's response needs: The purpose of the AFG financial assistance to departments is to enhance safety. How long can that safety reasonably be delayed?

  • Advanced funds provided to the manufacturer: If funds were provided in advance, are those funds retrievable in the event you determine that it is your best interest to void the contract?

  • Legal counsel: As if you were operating a business, you should seek legal counsel about your rights under any agreement for such a major purchase as a vehicle.

In short, make an informed and deliberate decision regarding which action is in the best interest of your department and your community. Extensions to your AFG period of performance will in large part rely on your responses to the points above as well as being dependent upon your compliance with the bonding requirements and inclusion of performance penalty clauses in the contract with the vehicle manufacturer. Extensions to a vehicle acquisition period of performance may not be considered if the requisite bond is not obtained or if the performance penalties are not included in the purchase contract.