Claims and Contract Disputes

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

The U.S. Government shutdown is now the longest in U.S. history and is starting to have serious implications for Government contractors.  One of many key concerns arises when contractors approach their contract funding ceiling — can they continue to work, and what happens if there is a cost overrun?[1]

The answers are often complicated for both contractors and agency officials, and depend on the terms of the contract and the statutory basis for the program.  Contractors facing this situation should keep seven points in mind.Continue Reading Surviving the Shutdown: Seven Things Contractors Should Consider If a Cost Overrun Is on the Horizon

The Civilian Board of Contract Appeals (“CBCA” or “Board”) recently published a decision on accrual of government claims for overpayment under the Contract Disputes Act (“CDA”). In the case, United Liquid Gas Co. d/b/a United Pacific Energy v. Gen. Servs. Admin., CBCA 5846, United Pacific Energy (“UPE”) appeals a General Services Administration (“GSA”) final decision seeking overpayments arising under four task orders that were issued under UPE’s GSA schedule contract to provide propane gas.

In its motion for partial summary relief, UPE argued that GSA’s claims for some of those overpayments were time-barred by the CDA’s six-year statute of limitations. The Board sided with UPE, finding that the discrete overpayment claims at issue in the motion accrued when the Government overpaid each corresponding invoice — each of which occurred more than six years before GSA issued its final decision. In doing so, the Board rejected GSA’s argument that the claims did not accrue until the Government issued an audit report discussing the overpayment issue, which occurred less than six years before GSA issued its final decision.

This decision is important because it adds to the limited number of opinions that the Board has published on claim accrual and reinforces established precedent. Our takeaways are below.Continue Reading CBCA Issues Rare Decision Addressing Government Claim Accrual

On August 17, 2018, the Civilian Board of Contract Appeals (“Board” or “CBCA”) published in the Federal Register its amended Rules of Procedure governing appeals under the Contract Disputes Act (“CDA”).  These amended rules: simplify and modernize access to the Board, clarify obligations under certain prior rules, and increase conformity between its rules and the Federal Rules of Civil Procedure (“Federal Rules”).  Furthermore, as reflected in the proposed changes issued in the Federal Register in March 2018, the amended rules are intended to “allow the Board to adopt and apply case law applying the relevant Federal Rules, as well as any future amendments to those Federal Rules, without revising the Board’s rules again.”

Our key takeaways are provided below, and a comparison of the Board’s prior and current rules can be found here.Continue Reading CBCA Rules Overhaul Finalized: Effective September 17, 2018

In a case of first impression, a Court of Appeals has held that a government subcontractor’s claim for reimbursement of its actual indirect costs was time-barred. Fluor Fed’l Solns. LLC v. PAE Applied Techs, LLC, No. 17-1468, 2018 WL 1768233 (4th Cir. Apr. 12, 2018) (per curiam) (unpublished). It is the first case to directly address the interplay between the Allowable Cost and Payment Clause of the Federal Acquisition Regulation (“FAR”), 48 C.F.R. § 52.216-7, and a statute of limitations. It highlights the risks government subcontractors face when they choose to wait for a Government audit rather than litigate promptly after a payment dispute arises.
Continue Reading Waiting For the Final Government Audit May Be Too Late

On April 24, 2018, the Department of Defense (DoD) issued a Notice and Request for Comment on draft guidance that DoD proposes for assessing contractors’ System Security Plans (SSPs) and their implementation of the security controls in NIST Special Publication (SP) 800-171. This includes assessments as part of source selection decisions and during contract performance. DFARS 252.204-7012 requires defense contractors to provide “adequate security” for networks where covered defense information (CDI) is processed, stored, or transmitted. Adequate security means, “at a minimum,” implementing NIST SP 800-171. To demonstrate implementation or planned implementation of the security controls in NIST SP 800-171, contractors must describe in a SSP how the security requirements have been implemented and develop plans of action and milestones (POA&M) that describe how any unimplemented security requirements will be met.
Continue Reading Draft DoD Guidance on SSPs and NIST SP 800-171 – Impact on Bid Protests and Ongoing Contract Performance

[Update: The CBCA’s amended rules will become effective on September 17, 2018.  Click here for additional information and our analysis.]  

On March 28, 2018, the Federal Register published proposed changes to the Civilian Board of Contract Appeals’ (“Board”) Rules of Procedure regarding appeals under the Contract Disputes Act (“CDA”).  These proposed rules indicate that the Board wishes to: simplify and modernize access to the Board, clarify certain rules, and increase conformity between its rules and the Federal Rules of Civil Procedure (“Federal Rules”).  Our key takeaways are below, and a side-by-side comparison between the Board’s current and proposed rules can be found here.  Interested parties may submit comments by May 29, 2018.
Continue Reading CBCA Proposes Changes to its Rules

Earlier this Fall, the Armed Service Board of Contract Appeals dismissed an appeal for lack of jurisdiction because the certified claim lacked a proper signature. Appeal of NileCo General Contracting LLC, ASBCA No. 60912 (Sept. 22, 2017). This simple oversight proved decisive. Although this case does not chart a new course in Contract Disputes Act (CDA) jurisprudence, it serves as a helpful reminder that the Board’s jurisdiction hinges on compliance with basic requirements. Failing to meet any of those requirements could have significant consequences.
Continue Reading Government Contracts 101 Reminder: Certified Claims Must Include a “Signature”

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.
Continue Reading Left Holding the Bag: Release Provision Precludes Recovery for Costs Incurred Post-Release