Claims and Contract Disputes

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a collection of memoranda, Q&A documents, and a class deviation addressing Section 3610 reimbursement, but the new draft guidance (“Guidance”), which includes a “reimbursement checklist” and accompanying instructions, provides significantly more detail regarding the process for requesting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.Continue Reading DoD Releases Draft Section 3610 Reimbursement Guidance

As the fallout from COVID-19 continues, federal contractors in every industry are seeing significant impacts on their ability to perform, ranging from scheduling delays to supply chain interruptions and increased costs of performance.  We previously addressed the rules and regulations governing excusable delays, which permit a contractor to avoid default if a failure to perform arises from causes beyond its control.  This next post addresses key FAR provisions that may entitle a contractor to a price adjustment or other recovery due to changes in contract requirements as a result of the pandemic.
Continue Reading Can I Recover the Added Costs of Work Caused by COVID-19?

As the COVID-19 virus extends its global reach, defense contractors may be called upon to begin implementing their contracts’ mission-essential services plans. These plans, required by DFARS 252.237-7023, facilitate mission-essential functions in extended crisis situations, including pandemics, which are explicitly noted in the DFARS. As the coronavirus outbreak continues, defense contractors should check whether their contracts include this clause and assess their readiness to implement the requirement if DoD requests activation of the company’s plan.
Continue Reading The Show Must Go On: Mission-Essential Services During the Coronavirus Outbreak

The global spread of the COVID-19 virus may put many federal contractors at risk of missing contractual deadlines. In a growing number of cases, supply chains may become cut off, work spaces may be closed, or employees may need to stay home, all of which could impact a contractor’s ability to perform in a timely manner. This is the first in a series of blog posts aimed at helping contractors navigate performance delays, changes, and other complications caused by the coronavirus outbreak.

When confronting challenges caused by the coronavirus, contractors should know that their contracts may contain clauses that would excuse these delays such as FAR 52.249-14 (cost reimbursement and time and material contracts), FAR 52.249-8 (fixed price supply and service contracts), and FAR 52.212-4 (commercial contracts). All of these clauses share a common thread – a contractor should not be in default because of a failure to perform the contract if the failure arises from causes beyond the control and without the fault or negligence of the contractor.
Continue Reading “Excuse Me, My Performance Has been Interrupted”– How Excusable Delay Provisions in the FAR May Help Federal Contractors Affected by the Coronavirus

The U.S. Court of Federal Claims recently overturned an agency’s decision to terminate a government contractor for default ─ finding that the government allowed a series of contract disputes, poor practices, conflicting personalities, and a lack of effective communication to cloud its termination analysis.  The case serves as an important reminder that, when reviewing a termination for default, the Court gives little credence to the government’s “subjective beliefs” regarding the contractor’s ability to perform.  Rather, the Court conducts an objective inquiry and scrutinizes the events, actions, and communications that led to the agency’s termination decision. 
Continue Reading Back to Basics: Government’s Subjective Views About Contractor’s Performance Do Not Justify Termination for Default

Earlier this week, the Federal Circuit unanimously affirmed a 2017 ruling by the Armed Services Board of Contract Appeals (“ASBCA”) that held the United States Government breached its contractual obligation to provide physical security to KBR and its subcontractors during the height of the Iraq War.  The decision awards KBR $44 million, plus interest, in private security costs that the Government unilaterally recovered under the LOGCAP III contract.

The Court’s decision is significant in two respects.  First, it confirms that the affirmative defense of prior material breach is not a Contract Disputes Act (CDA) “claim” that must be presented to a contracting officer under M. Maropakis Carpentry, Inc. v. United States, 609 F.3d 1323, 1331 (Fed. Cir. 2010).  Second, the decision makes clear that a contractor is entitled to CDA interest on its claim to recover amounts taken or held by the Government to enforce a government claim.  We discuss each of these important rulings below.
Continue Reading Federal Circuit Further Clarifies Maropakis and CDA Interest Rule in Significant “Contractor-on-the-Battlefield” Decision

The Contract Disputes Act (“CDA”) is probably not the first law that comes to mind when a government contractor is named as a defendant in a personal injury or wrongful death suit. But a recent decision from the U.S. Court of Federal Claims illustrates why the CDA ─ and its six-year statute of limitations ─ should be top of mind for any contractor that is sued in tort and wants the government to take over its defense or to reimburse its uninsured legal fees or settlement/judgment costs. The Court’s decision, which is the latest opinion in a long-running dispute, is an important reminder for contractors that are indemnified by the government for liabilities to third persons, including under clauses such as FAR 52.228-7, Insurance ─ Liability to Third Persons (MAR. 1996) and FAR 52.250-1, Indemnification under Public Law 85-804 (APR. 1984).
Continue Reading Time Stops for No One: COFC Reminds Indemnified Contractors to Mind the CDA Statute of Limitations

While you might not be able to fight City Hall, you can fight your CPARS rating. In a short opinion published last week, the ASBCA confirmed it has jurisdiction to annul an inaccurate and unfair government evaluation of a contractor’s performance. Cameron Bell Corporation d/b/a Government Solutions Group, ASBCA No. 61856 (May 1, 2019).  Though the ASBCA cannot require the government to issue a specific rating, it can remand the matter to the contracting officer with instructions to redo the evaluation ─ a perhaps imperfect, yet still potent form of relief available to contractors who believe the government has improperly rated their contract performance.
Continue Reading ASBCA Confirms Contractors May Challenge Unfavorable CPARS Ratings

Two recent developments in Albany suggest that New York is poised to kick its debarment activity into a higher gear. First, Governor Andrew Cuomo issued an executive order pointedly reminding state entities of their authority to debar non-responsible contractors and directing all state entities to ensure that contractors remain “responsible” throughout the term of their contracts. Second, the New York legislature recently enacted a bill to reform the Metropolitan Transportation Authority (MTA), which included far-reaching provisions that allow MTA to debar any contractor that exceeds 10% of the contract cost or time for a construction project. Together, these developments indicate a move towards greater scrutiny of contractor performance, and they highlight the significant consequences of not meeting compliance and performance obligations.
Continue Reading New York Executive Order and Legislation Signal Increased Debarment Activity

In Amec Foster Wheeler Environment & Infrastructure, Inc. v. Department of the Interior, CBCA 5168 et al. (Feb. 27, 2019), the Civilian Board of Contract Appeals (“CBCA” or “Board”) recently reiterated that a contractor need not assert every conceivable legal theory of relief as soon as it encounters an unforeseen condition on a construction project. Rather, a contractor may later be able timely to assert additional claims under distinct theories based on operative facts learned during discovery. Apropos of recently celebrated St. Patrick’s Day, this case indicates that discovery may be the rainbow that leads a contractor to a bigger pot of gold, i.e., operative facts that permit assertion of more valuable claims based on alternative legal theories.
Continue Reading CBCA Recognizes that Discovery May Uncover New Claims