Georgia Tech Procurement Assistance Center

Federal contractors may be able to recover costs caused by the government shutdown

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The current government shutdown is now the longest in U.S. history, and many federal contractors are incurring costs as a result of shutdown-related work stoppages and delays. Luckily, many federal contracts contain clauses that provide a potential avenue for recovery of such costs. Further, there are practical steps that contractors can take to increase their chances of recovering shutdown-related costs from the government.

What contract clauses might apply?

Several Federal Acquisition Regulation (FAR) clauses, including the following ones, could provide contractors with an avenue to recover costs incurred as a result of shutdown-related delays or work stoppages:

  • FAR 52.242-14 (Suspension of Work)
  • FAR 52.242-15 (Stop Work Order)
  • FAR 52.242-17 (Government Delay of Work)
  • FAR 52.243-2 (Changes – Cost-Reimbursement)
  • FAR 52.243-3 (Changes – Time-and-Materials or Labor-Hours)

It is very important to note that these clauses generally impose very short timeframes in which a contractor must provide the government with notice and/or assert its right to an adjustment.

Keep reading this article at: https://www.jdsupra.com/legalnews/federal-contractors-may-be-able-to-53396/

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/

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/

A two-way street: The duty of good faith and fair dealing

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The contractual duty of “good faith and fair dealing” is well established in private contracts.  Depending on your jurisdiction, there is very likely either a formal or an informal rule that parties to a contract must deal with each other honestly and in good faith.  This is (usually) not a written contract term – rather, the duty is implied automatically in order to reinforce the parties’ intent when entering into the agreement.

But, did you know that the same kind of duty exists in public contracts – and runs as a two-way street between contractors and the Federal government?  It is true.  And it can help your business in the pursuit of time or damages from the government as part of an REA or Claim.

Implicit in every government contract is the duty for the government to treat the contractor fairly and act in good faith.  Courts discussing this duty place both affirmative and negative obligations on the government.  In other words, the government: 1) must take active steps to enable the contractor’s performance, and 2) must not willfully or negligently interfere with said performance.

Keep reading this article at: https://governmentcontracts.foxrothschild.com/2017/04/articles/government-contracting-101/government-contracting-101-duty-of-good-faith-and-fair-dealing/

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/

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