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Wait! Wait! Don’t sign that!

October 4, 2019 By Nancy Cleveland

Government Contracts attorneys have long advised clients to be wary of executing contact modifications containing broad release language.  In such situations, a simple modification extending the contract schedule or addressing a specific item of work can result in the government later taking the position that by executing the modification the contractor intended to release all related claims, no matter how tenuous the connection between the subject of the modification and the later claims.

A recent case from the Court of Federal Claims stands as a good reminder to contractors not to let their guard down when executing modifications with the government.  On September 23, 2019, the court issued a decision in Meridian Engineering Company v. The United States, No. 11-492C, in which it clarified the law surrounding the scope of releases and the doctrine of accord and satisfaction.

Continue reading at:  Government Contracts Insider

Filed Under: Contracting Tips Tagged With: modification, release of claims

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

October 26, 2018 By Nancy Cleveland

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

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

May 10, 2017 By Nancy Cleveland

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/

Filed Under: Contracting News Tagged With: ASBCA, CBCA, claim, equitable adjustment, REA, release of claims

When a ‘contract release’ releases a claim is a classic contract tongue twister

January 10, 2017 By Nancy Cleveland

cbcaYou are reviewing a contract modification and notice a paragraph titled “Release of Claims.”  Do you know what claims will be released by this language?

Or worse, the contracting officer just issued a final decision rejecting your claim (under the Contract Disputes Act) because the release in a contract modification constituted an accord and satisfaction.  Did you sign that release and realize its impact?

The Civilian Board of Contract Appeals’ (CBCA) recent decision in Perry Bartsch Jr., Constr. Co. v. Dept. of the Int., CBCA 4865, 5071 (December 8, 2016) helps contractors answer these questions and understand the scope and contours of a release.  Generally, this case offers  important guidance about how to draft a release in an effective and narrow way, and the types of factors that the CBCA will consider when interpreting a release.  Specifically, this decision addresses the issue of whether an apparent global release of claims, contained in just one of many contract modifications, can extinguish all potential claims against the Government.

For a more complete review of the Bartsch decision and its implications, continue reading this article at: https://www.insidegovernmentcontracts.com/2016/12/contract-release-release-claim-classic-contract-tongue-twister/

Filed Under: Contracting Tips Tagged With: CBCA, certified claim, claim, Contract Disputes Act, release of claims

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