A recent Armed Services Board of Contract Appeals decision serves as a timely reminder for contractors to carefully read and consider any release of claims before signing — especially when you may have otherwise-recoverable coronavirus-related cost increases. Continue Reading Look Before You Release — ASBCA Enforces Release of Claims to Contractor’s Detriment
Over the last few months, we’ve reported on various government contracts decisions that illustrate the impact a release of claims provision can have on contractors. A few weeks ago, we published a Feature Comment in The Government Contractor (titled “Release Me? Five Things Every Government Contractor Needs To Know Before Signing A Release Of Claims”) in which we provided contractors practical guidance on minimizing the risks of inadvertently releasing potential claims against the government and avoiding unnecessary (and costly) litigation regarding the interpretation of a release. For example, we recommended that contractors should: (1) be precise when drafting and negotiating a release provision and, whenever possible, avoid using sweeping language, and (2) maintain contemporaneous documentation of release negotiations, including of any communications with the government before, during and after the release is executed. This guidance likely would have helped the contractor in MBD Maintenance, LLC v. United States Post Service, PSBCA Nos. 6625, 6642, the latest Board of Contract Appeals decision to bar a contractor’s claims based on a broad release of claims provision.
In MBD Maintenance, the contractor submitted a claim (and initiated an appeal) after signing a broad release of claims form associated with its request for final payment. That release stated the contractor would “remise, release, and discharge the Postal Service . . . of and from all liabilities, obligations, claims, and demands whatsoever under or arising” from the contract. This release also included a block that allowed the contractor to identify any excepted claims, but the contractor left that block blank.
The Postal Service moved for summary judgment, arguing that the general release provision barred the claim. The contractor asserted that the release should not apply because it “reasonably believed it could continue to pursue its claim based on conversations between the parties” about the claim and prior to executing the release. In denying the appeal, the Postal Service Board of Contract Appeals rejected the contractor’s argument, in part, because of lack of evidence supporting its argument. In other words, the presentation of contemporaneous documentation may have helped the contractor overcome summary judgment and live to fight another day.
The bottom line: Contractors should never treat a release of claims provision as an afterthought or assume that the parties’ contemporaneous ─ but undocumented ─ discussions will provide a sufficient basis upon which to pursue claims moving forward. To the contrary, as demonstrated by this decision, and as discussed in our recent article, a broad release provision can result in a claim being dismissed outright – regardless of the substantive merits of the claim itself.
A few weeks ago, we provided a few tips for negotiating and assessing a release contained in a contract modification, and discussed why the Civilian Board of Contract Appeals (CBCA) found that a global release contained in one of many contract modification was ambiguous.
Now, we consider a different scenario: what happens when a final payment clause requires the government to present a “final [payment] voucher” and “draft release of claims” form to the contractor—as opposed to the typical reverse scenario prescribed by FAR 52.232-5(h)—and the contractor fails to sign and return that voucher and release of claims form before the deadline stated therein? According to the CBCA in Ahtna Envtl., Inc. v. Dept. of Transp., CBCA 5456 (December 22, 2016) (AEI), this type of self-effectuating deemed release will not bar a contractor’s claim when the government knew about the claim and considered it despite the alleged release.
Continue reading for a summary of the AEI decision and our key takeaways. Continue Reading A self-effectuating deemed release of claims? Say it ain’t so.
Last week, DoD released a draft of its much-anticipated guidance implementing Section 3610 of the CARES Act, which authorizes the government to reimburse qualifying contractors for the costs of providing certain paid leave to employees as a result of the COVID-19 pandemic. DoD previously published a collection of memoranda, Q&A documents, and a class deviation addressing Section 3610 reimbursement, but the new draft guidance (“Guidance”), which includes a “reimbursement checklist” and accompanying instructions, provides significantly more detail regarding the process for requesting and substantiating claims for reimbursement under the statute.
A number of open questions remain pending the issuance of final guidance, as discussed below, but the contours of DoD’s Section 3610 process are becoming increasingly clear. Contractors interested in pursuing recovery under the statute should start preparing now to satisfy these emerging rules and requirements.
A few years ago, we reported on regulations governing federal contractors’ nondiscrimination obligations with respect to LGBT employees. The Trump Administration has taken steps to roll back many Obama-era efforts, although the Executive Order and rules establishing LGBT-related protections for employees of federal contractors remain in force, at least for now. The Second Circuit recently decided a high-profile case that affirmed the legal basis for those obligations and extended them beyond the federal contractor community. In doing so, the Second Circuit rejected the Trump Justice Department’s position with respect to LGBT nondiscrimination.
The case, which has generated significant press coverage, deserves close attention from all employers, including contractors, as LGBT nondiscrimination rules continue to develop in courts, executive agencies, and legislatures. In this post, we examine the considerations for government contractors and outline some best practices for companies that work with the federal government. Continue Reading In Sexual Orientation Nondiscrimination Claims, “EEO Is the Law,” and Not Just for Government Contractors
Over the last year, we have reported extensively on various government contract decisions regarding contract releases. In Sylvan B. Orr v. Department of Agriculture, CBCA 5299 (Sep. 29, 2017), the Civilian Board of Contract Appeals (“CBCA” or “Board”) published yet another notable opinion on this topic. This decision demonstrates why it is critical to reserve your rights regarding potential claims sparked by conduct that occurs before a release of claims provision is signed—even when the additional costs at issue are not incurred until after the release is executed.
On the heels of our recent post offering key takeaways from recent release of claims decisions, the ASBCA and the 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.
You 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 Bartsch and its implications, please continue reading.
The Armed Services Board of Contract Appeals (“ASBCA” or the “Board”) recently issued an opinion addressing several important, and controversial, topics of interest to government contractors. The lengthy opinion addressed key issues related to the Board’s jurisdiction over government claims and affirmative defenses based on alleged contractor fraud, the Contract Disputes Act (“CDA”) statute of limitations, and the impact of criminal plea agreements and civil False Claims Act settlements on contract disputes.
On December 3rd, the Department of Justice released its annual summary of recoveries in False Claims Act (FCA) cases. Although down from last year’s $5.69 billion, this year’s recoveries of $3.5 billion demonstrate the power that the government wields to drive settlements of fraud allegations. Of the $3.5 billion, $1.1 billion in recoveries are attributable to settlements and judgments in cases alleging false claims for payments under government contracts. A good portion of these settlements likely were driven by claims of false implied certifications.
For many years, federal courts have grappled with the issue of whether factually accurate claims submitted to the government for payment can nevertheless be “false or fraudulent,” pursuant to an implied certification theory, because of an underlying violation of law. On December 4th, the Supreme Court granted certiorari in a case that should decide whether this theory of liability is valid. Continue Reading High Court to Resolve Split of Authority on “Implied” False Claims