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‘New’ means ‘new’ when the construction contract says ‘new’

January 19, 2018 By Andrew Smith

There’s “new.” And there’s “new to you.” And there’s “refurbished new.” And there’s “open box special new.” And there’s “floor display model new.”  But when it comes to contract specifications requiring “new” equipment, one court looked to a dictionary to define it as “never used before” and “free of significant damage.”

In a recent case, Reliable Contracting Group, LLC v. Department of Veterans Affairs, 779 F.3d 1329 (Fed. Cir. 2015), the Government entered an agreement with the Contractor to install three back-up generators.  The contract specifications required new equipment:

All equipment, material, and articles incorporated into the work covered by this contract shall be new and of the most suitable grade for the purpose intended, unless otherwise specifically provided in this contract.

A dispute arose over the nature of the equipment supplied because the contract did not define the word, “new.”  Furthermore, Federal Acquisition Regulation 52.211-5, which was incorporated into the contract, requires that supplies “new, reconditioned, or remanufactured,” and it defined “new” to include that the supplies be “composed of previously unused components.”

Keep reading this article at: https://www.bestpracticesconstructionlaw.com/2015/06/articles/legal-trends/new-materials/

Filed Under: Contracting Tips Tagged With: construction, contract clauses, FAR, interpretation

Government contracts and the ‘Chevron Deference’

October 31, 2017 By Andrew Smith

Under Chevron U.S.A. v. NRDC and its progeny, courts show great deference to administrative agencies’ interpretations of statutes and regulations.  However, it does not necessarily follow that courts will provide that same deference to agencies’ interpretations of government contracts.

Last week, in a statement respecting the denial of certiorari in Scenic America, Inc. v. Dept. of Transportation, Supreme Court Justice Neil Gorsuch pointed out this distinction and raised an issue that merits further judicial attention.

Chevron holds that as long as an agency presents a “reasonable” interpretation of a statute, a court will typically side with the agency’s interpretation.  The Supreme Court has extended the Chevron doctrine to agencies’ interpretations of their own regulations.  See, e.g., Auer v. Robbins, 519 U.S. 452 (1997).  The Supreme Court has also placed important limitations on the Chevron doctrine, refusing to give deference when it is clear that Congress did not intend to delegate such authority to the agency.  See, e.g., King v. Burwell, 135 S. Ct. 2480 (2015).

However, the Supreme Court has never considered the applicability of Chevron to agencies’ interpretation of government contracts.

Keep reading this article at: https://www.insidegovernmentcontracts.com/2017/10/government-contracts-chevron-deference-justice-gorsuch-weighs/

Filed Under: Contracting News Tagged With: Chevron deference, contra proferentem, deference, interpretation, Supreme Court

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