Earlier this month, the Federal Circuit provided new guidance on the high burden that the government must carry to terminate a contract for default. In Dep’t of Transp. v. Eagle Peak Rock & Paving, Inc., the Federal Circuit held that the validity of a termination decision does not depend exclusively on the contracting officer’s reasoning — rather, the government must produce evidence during litigation to prove the contractor’s default under a de novo standard of review. The Eagle Peak decision illustrates that, absent a threshold showing that the contracting officer’s decision was pretextual, contractors challenging a default decision should focus on developing the “clean slate” record needed to rebut the government’s allegations, rather than disputing the contracting officer’s rationale (or lack thereof) for termination.
Construction Contracting
Department of Labor Proposes Overhaul to Davis-Bacon Act Regulations
Many contractors are familiar with the Davis-Bacon Act (“DBA”), the statute that requires government contractors to pay prevailing wages to workers employed in the construction, alteration, or repair of buildings or other public works. The DBA is enforced by the Department of Labor, which is responsible for issuing the “wage determinations” that list the prevailing wages for different labor categories within a geographical area and for promulgating regulations used to implement the DBA’s requirements.
On March 18, 2022, the Department issued a notice of proposed rulemaking (“NPRM”), announcing that it intends to make a number of revisions to the DBA regulations. In the Department’s view, these revisions represent the largest change to the DBA regulations since the last major rewrite in 1981.…
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Look Before You Release — ASBCA Enforces Release of Claims to Contractor’s Detriment
By Kayleigh Scalzo on
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. …
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New York Executive Order and Legislation Signal Increased Debarment Activity
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.
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Trump’s New Executive Order Requires Additional Buy American Preferences For Infrastructure Projects
By Sandy Hoe, Michael Wagner & Peter Terenzio on
Last week, President Trump issued a new executive order, entitled “Strengthening Buy-American Preferences for Infrastructure Projects.” This order serves as an extension of the President’s earlier April 2017 “Buy American and Hire American” executive order, which we have previously analyzed in this space. The April 2017 order stated that “it shall be the policy of the executive branch to buy American and hire American,” and, among other things, directed agencies to “scrupulously, monitor, enforce, and comply with” domestic preference laws (referred to by the executive order as “Buy American Laws”) and to minimize use of waivers that would permit the purchase of foreign end products.
The President’s new order continues to emphasize the importance of “the use of goods, products, and materials produced in the United States,” but is specifically directed towards infrastructure projects that are recipients of federal financial assistance awards. As we have reported previously, federally-financed infrastructure has also been a stated area of focus for the Trump administration, although the Administration’s “Legislative Outline for Rebuilding Infrastructure in America” released last year curiously lacked any domestic preference requirements.
The new executive order makes up for this previous omission and then some: it has the potential to affect a vast number of programs and projects, and may in fact impose domestic sourcing requirements in areas—such as internet infrastructure—that are not typically targets for domestic preferences.…
Pragmatism Wins the Day in GAO Buy American Protest
Last month, the Government Accountability Office (GAO) issued a bid protest decision regarding the application of Buy American Act (BAA) requirements to a solicitation for construction. In this decision, GAO rejected the agency’s determination that an offeror’s bid was nonresponsive because the offeror failed to provide certain required information for the evaluation of a potential BAA exception. A summary of the decision and our takeaways are below.
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Construction Contractors: The Government Contractor Defense is Alive and Well in the Fifth Circuit
Construction contractors take note: the government contractor defense is alive and well in the Fifth Circuit. In Sewell v. Sewerage and Water Board of New Orleans, the Fifth Circuit recently confirmed that construction companies can successfully assert the government contractor defense in response to tort lawsuits that arise from their performance of federal public works and infrastructure projects. This is a welcomed decision in the Fifth Circuit, which had signaled in recent years that a higher level of proof may be required to establish the first element of the defense ─ i.e., that the government meaningfully reviewed and approved reasonably precise specifications for the allegedly defective construction feature.
The Sewell case illustrates that ─ with the right litigation strategy and a skillfully crafted evidentiary record ─ construction contractors may well prove the defense in cases involving even “rudimentary or general construction features.”…
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DHS Elaborates on its Anticipated Request for Border-Wall “Prototypes”
By Jennifer Plitsch, Kayleigh Scalzo & Andrew Guy on
Posted in Construction Contracting
Last week, we reported that the Department of Homeland Security, Customs and Border Protection (CBP) had published a presolicitation notice announcing its intent to issue a solicitation “for the design and build of several prototype wall structures in the vicinity of the United States border with Mexico.” On Friday, March 3, CBP amended that notice “to provide additional information to interested bidders” and address “a revision in strategy.” The revised solicitation includes several significant changes that will be of interest to contractors and other observers. …
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DHS Announces Intent to Award Contracts for Border-Wall “Prototypes” by Mid-April
By Jennifer Plitsch & Kayleigh Scalzo on
Posted in Construction Contracting
On Friday, February 24, 2017, the Department of Homeland Security, Customs and Border Protection published a presolicitation notice announcing its intent to issue a solicitation “for the design and build of several prototype wall structures in the vicinity of the United States border with Mexico.” At least on the government procurement front, this notice marks the most concrete indication of the federal government’s intent to construct a wall along the U.S. border with Mexico.
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A self-effectuating deemed release of claims? Say it ain’t so.
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.…
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