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ASBCA voids release of government’s liability because small business subjected to duress

October 26, 2018 By Andrew Smith

As a general rule, when a contractor signs a full settlement and release with respect to a dispute with the Government, the dispute is considered settled, and the Government is released from any further liability for that particular claim.

There are, however, exceptions to the rule.

One rare exception is when the Government subjects the contractor to duress, which may render the release null and void.

In a remarkable decision, the Armed Services Board of Contract Appeals (ASBCA) recently voided a release for precisely this reason and sustained an appeal where there was evidence of a pattern of improper procurement practices, abuse of discretion in the administration of the contract, and a breach of the Government’s duty of good faith and fair dealing.

The ASBCA also made a point of scolding the procurement and contracting officials who treated a struggling small business in such an appalling manner.

Keep reading this article at: http://www.mondaq.com/unitedstates/x/747456/

Filed Under: Contracting News Tagged With: abuse of discretion, Army Corps of Engineers, ASBCA, duress, fair dealing, good faith, release of claims, settlement

Government’s delayed response breached contract, says ASBCA

July 20, 2018 By Andrew Smith

Note: Author of “The Small Business Guide to Government Contracts,” Steven J. Koprince blogged recently about a recent ruling by the Armed Services Board of Contract Appeals (ASBCA) that the government breached a contract when it waited more than three months to respond to a contractor’s request to amend the contract’s scope of work.  Here is his writing, along with a link to his post:

Here’s a situation my colleagues and I see with some frequency: a contractor, in the course of working on a government contract, submits a request of some sort to the agency.  Then waits for a response.  And waits some more.  Meanwhile, the government’s delay in responding prevents the contractor from moving forward with some aspect of the project, causing the contractor to incur costs.

For contractors faced with this type of government inaction, a recent decision by the Armed Services Board of Contract Appeals is welcome news.  In that case, the ASBCA held that the government breached its implied duty of good faith and fair dealing by waiting more than three months to respond to the contractor’s request to amend the Statement of Work – allowing the contractor to “twist in the wind” during that period.

The ASBCA’s decision in Relyant, LLC, ASBCA No. 59809 (2018) involved an Army contract for the acquisition of pre-fabricated relocatable buildings (abbreviated “RLBs” in the decision) for use at two different sites in Afghanistan.

The solicitation’s Statement of Work included certain specifications for the RLBs.  Among those specifications, the SOW required the installation of gypsum interior drywall to the interior of the shipping containers that would cover fiberglass insulation.  But in its proposal, Relyant, LLC proposed a different configuration: the use of a “sandwich panel,” including Styrofoam as the insulator instead of separate insulation and drywall.

Keep reading this article at: http://smallgovcon.com/claims-and-appeals/governments-delayed-response-breached-contract-says-asbca/

Filed Under: Contracting Tips Tagged With: appeal, Army, ASBCA, breach of contract, delays, fair dealing, good faith, SOW, statement of work

Good faith and fair dealing upheld in federal construction contracts

May 27, 2015 By ei2admin

In United States v. Metcalf, the Federal Circuit Court of Appeals agreed to review a decision of the lower court. If upheld, it would make contractor claims against the government for the breach of the duty of good faith and fair dealing very difficult by requiring the contractor to show intentional bad faith by the government, as opposed to prior precedent that the contractor need only prove that the government objectively acted unreasonably.

US Court of AppealsThe policy arguments for reversal of the lower court decision in Metcalf were straightforward and compelling. Contractors, when bidding work, must consider the risk of government-caused delays, impacts and changes. If the very high burden of proof for the breach of the implied duty of good faith and fair dealing applied, then contractors would either be forced to increase their price or forgo bidding government work. In either case, the market, the procurement process and the public would suffer.

In a far-reaching decision, the Court of Appeals reversed the lower court and set forth the standards for a claim of the breach of the duty of good faith and fair dealing.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=390454

Filed Under: Contracting News Tagged With: construction, fair dealing, fairness, good faith

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