Georgia Tech Procurement Assistance Center

Can contractors force a written decision on a claim?

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For a contractor with a claim on a federal construction project, an essential occurrence is a “final decision” by the government contracting officer.  Ideally, this is a formal written response addressing the merits of the claim.

But if the contracting officer declines to respond within 60 days, it becomes a “deemed denial” of the claim.  A final decision, formal or deemed, is a jurisdictional prerequisite to the contractor’s right to appeal.

Contractors would obviously prefer a government agency to go on the record with a response to a claim. The Contract Disputes Act allows a contractor to petition a board of contract appeals “to direct a contracting officer to issue a decision in a specified period of time.” Does this empower contractors to force a written claim decision by the government?  Unfortunately, that question was recently answered in the negative.

Keep reading this article at: http://www.constructiondive.com/news/can-contractors-force-a-written-decision-on-a-claim/505464/

When is an unforeseen condition a ‘differing site condition’?

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I was reviewing various articles I have written over the years and came across a prior version of this one about differing site conditions, written nearly twenty years ago.   I was curious – does this cup still hold water?

It does.

Many construction contracts contain some version of a “differing site conditions” clause.   It is found in the current version of AIA’s A201 general conditions, as well as in the EJCDC equivalent.   It also appears in most state DOT specifications, as well as in federal government construction contracts.   Generally, it provides for a change order (subject to procedural compliance) when the contractor encounters (i) subsurface or other concealed conditions that differ materially from the conditions indicated by the contract documents or (ii) unknown physical conditions of an unusual nature differing materially from those ordinarily encountered and recognized as inherent to the work provided for in the contract documents.   But, as they say, “timing is everything.”   This adage applies, too, to a differing site conditions claim.

In Olym­pus Corp. v. United States, 98 F.3d 1314 (Fed. Cir. 1996), the United States Federal Circuit Court of Appeals was confronted with the following ques­tion: Are delays caused by a govern­ment caused hazardous materi­als spill compensable under the federal Differing Site Condi­tions clause?  The court an­­­­­s­wered “no” based on its con­clusion that to be con­sidered a differing site con­dition, the condition must exist at the time the contract was formed.

Olympus entered into a fixed price contract with the United States to pave the plant yards at the Stratford Army Engine Plant located in Strat­ford, Connecticut. As man­­­­­­­­­­­­­dated by the Federal Acquisition Regulation, 48 C.F.R. ‘ 52.236-3 (1995), the contract contained a standard Differing Site Conditions clause which provided, in part, for an equitable adjustment, upon notice, of  “subsurface or latent physical conditions at the site which differ materially from those indicated in [the] contract.”

Keep reading this article at: http://www.jdsupra.com/legalnews/when-is-an-unforeseen-condition-a-73987/

Are you prepared for a contract cancellation?

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Going back to his campaign pledges, President Trump promised to cut government waste in conjunction with cutting corporate tax rates. As part of this, the president threatened to terminate contracts with the two largest government contractors: Lockheed Martin’s F-35 and Boeing’s Air Force One programs.

A surge in contract terminations could be in the offing as federal agencies align their goals with White House intentions. With this in mind, preparing for the possibility of a contract termination is a defensive strategy that contractors should undertake now. Here are three key steps you should consider immediately:

  1. Plan ahead. Never consider your contract as “termination-proof.”
  2. Fully understand the contract termination process
  3. Learn how to calculate and submit your Request for Equitable Adjustment or settlement proposal.

The possibility of a contract termination should be incorporated into every government contractor’s business continuity plan. Implementing safeguards and procedures designed to mitigate the risk of a termination will limit the impact it has on your organization’s operations. Ask yourself, “Does my organization have procedures in place to deal with cure notices, customer complaints, and quality issues? What about monitoring subcontractors?”

Keep reading this article at: https://washingtontechnology.com/articles/2017/06/09/insights-contractor-termination.aspx

A tale of two contract releases: One for the government and one for the contractor

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On the heels of the recent post on the subject of key takeaways from recent release of claims decisions, the Armed Services Board of Contract Appeals (ASBCA) and the Civilian Board of Contract Appeals (CBCA) have published another round of notable opinions regarding contract releases:  Supply & Service Team GmbH, ASBCA No. 59630 and ServiTodo, LLC, CBCA 5524.

Both decisions are important, albeit for different reasons.

  • The ASBCA decision demonstrates how a release provision in a contract modification providing an equitable adjustment can bar the government from processing an administrative offset against a contractor.
  • The CBCA decision illustrates the difficulties contractors face when attempting to minimize the impact of a broadly worded release of claims provision.

Keep reading this article at: https://www.insidegovernmentcontracts.com/2017/05/tale-two-contract-releases-one-government-one-contractor/

Should I file a claim or an REA on my government contract?

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Government contractors are frequently faced with the situation where they are owed additional time or are entitled to damages from the government on a contract.  For example, the government might be responsible for delays to the project schedule.  Or it might direct changes to the contract that make it more expensive to perform.

There are generally two methods for the contractor to pursue recovery:

  1. Filing a Claim under the Contract Disputes Act or
  2. Submitting a request for equitable adjustment (REA) to the contracting officer.

There are pros and cons to both methods and Contractors should take the time to consider these options carefully before moving forward.

What is the Difference between a Claim and an REA?

Claims and REAs are very similar (but not identical) in both form and function.  The basic concept is that the contractor is owed time or money (or both) on a contract and is providing the government with a written request for compensation.  The well-drafted Claim or REA will include a basic summary of the contractor’s performance and an easy-to-understand explanation of why it is entitled to the damages sought.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=540486

Reminder: Requests for equitable adjustment are not claims

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A request for equitable adjustment (REA) is not a “claim” under the Federal Acquisition Regulation (FAR).  Although a REA and a claim can look very similar, there are important legal distinctions.

And as one contractor recently learned, the distinction between a REA and a claim can make all the difference when it comes to a potential appeal.

First things first: what exactly is the difference between a REA and a claim?

Keep reading this article at: http://smallgovcon.com/claims-and-appeals/reminder-a-rea-is-not-a-claim/

The Dispute Continuum

Contractors affected by recent hikes in Service Contract Act’s health & welfare rates must file timely claims

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On federal contracts subject to the Service Contract Act, the prevailing health and welfare (H&W) fringe benefit rate was increased, effective July 22, 2014, to $4.02 per hour.  (One exception: The new benefit rate in Hawaii is $1.66.)

The new H&W rate applies to all invitation for bids opened, or other service contracts awarded on or after July 22, 2014.

Contracting offices are to include a new wage determination reflecting the new H&W rate to trigger the contractor’s obligation to pay the higher H&W rate. Contracting offices may make “pen and ink” changes to the current wage determinations received for contracts beginning on or after July 22, 2014 and for which the updated rates were not included.

Once the contracting authority provides a new wage determination, contractors must submit — within 30 days of the change — any claim for an equitable adjustment as a result of increased costs attributable to wage determination rate changes.

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