Afterthoughts: REAs versus Claims

On September 28, 2017, Professor Ralph Nash and Tim Sullivan hosted a virtual classroom on the topic of Requests for Equitable Adjustments and Claims. Following the virtual classroom, I interviewed Professor Nash to ask questions related to the discussion during the training. I would assert that if examined just from the perspective of reading case law on the issue, the difference between an REA and a claim feels like a distinction without a purpose. What is the use of an REA – is it still a useful submission or should we just submit claims so that you have the right to appeal? The purpose of the REA is to start negotiations. Fundamentally when something happens during performance that leads a contractor to conclude that they … Continue reading

Afterthoughts: Organizational Conflicts of Interest

On April 25, 2017, Professor Ralph Nash and Tim Sullivan hosted a virtual classroom on the topic of Organizational Conflicts of Interest. Following the virtual classroom, I interviewed Professor Nash to ask questions related to the discussion during the training. Can you provide an overview of the respective obligations and responsibilities of contractors, with respect to monitoring, reporting and complying with Organizational Conflicts of Interest rules? The main burden for the contractor comes with contracts for advisory kinds of services. Contractors must consider what other projects this might cut them out of. Essentially this requires contractors to predict what future projects might be. If the contractor will be advising on how to construct a procurement, they have to determine if that will later prevent them … Continue reading

SUBCONTRACTOR COSTS: CAN THE PRIME BILL FOR VACATION COSTS, EVEN IF INVOICED SEPARATELY?

Is a prime contractor entitled to bill for vacation costs incurred by and owed to its subcontractor on a time and materials contract, even if they were invoiced separately from the subcontractor’s salary cost? The Armed Services Board of Contract Appeals (“ASBCA”) answered “yes,” explaining that the application of the clause at Federal Acquisition Regulation (“FAR”) 52.232-7, “Payments Under Time and Materials and Labor Hour Contracts” so mandates. Access Personnel Servs, Inc., ASBCA No. 59900, September 7, 2017. Access used a subcontractor to perform a portion of its Navy contract for personnel support services. The subcontractor, Professional Services of America, invoiced Access separately for its personnel’s vacation pay, instead of incorporating the vacation pay into the hourly rates that it billed Access. Access advised the … Continue reading

CHANGES CLAUSE CAN’T BE USED TO CHANGE TERMS AND CONDITIONS, INCLUDING PAYMENT TERMS

The Federal Acquisition Regulation (“FAR”) defines “change order” to mean “a written order, signed by the contracting officer, directing the contractor to make a change that the Changes clause authorizes the contracting officer to order without the contractor’s consent.” FAR 2.101. The question is, what types of changes are authorized by the Changes clause? The answer is found in the Changes clause and the caselaw. The simple answer is: only limited types of changes, and generally, the terms and conditions in the contract cannot be changed by a change order. And in particular, payment methods or amounts cannot be changed, as demonstrated in a recent case. CH2M-WG Idaho, LLC, CBCA 3876, Sept. 7, 2017. FAR 52.243-1, Changes—Fixed-Price (AUG 1987), states The Contracting Officer may at … Continue reading

BE CAREFUL WHAT YOU SIGN

Now comes two cases decided on the same day by the Armed Services Board of Contract Appeals that demonstrate how important it is for a contractor to understand what he/she signs. Arab Shah Const. Co., ASBCA No. 60813, September 7, 2017 and Central Texas Expr. Metalwork LLC,, ASBCA No. 61109, September 7, 2017. In both cases, the contractors signed away rights to potential claims they could have reserved. Case 1: In Arab Shah, the Air Force contract was for construction of two metal pole barns in Afghanistan. Before being built, one of the pole barns was no longer needed and the Contracting Officer (“CO”) emailed Arab Shah stating that he wanted the barn built at another location, and would modify the contract, if the contractor … Continue reading

PROTESTER HAS BURDEN OF SHOWING TIMELY ELECTRONIC DELIVERY

E-mail is a very useful tool, especially in government contracting. But the Government Accountability Office (“GAO”) recently confirmed a long line of cases where an offeror contended that it had sent in its proposal by e-mail, but the agency did not receive it and could find no evidence in its email servers of receipt. Ghazanfar Neft Gas LTD, B-414636, July 21, 2017. In this and similar cases, the GAO concluded that the protester had failed to satisfy its burden of showing that it timely delivered its proposal to the agency by email. Two sections of the FAR are important here: FAR 15.208(a) which states “[o]fferors are responsible for submitting proposals, and any revisions, and modifications, so as to reach the Government office designated in the … Continue reading

HOW TO GET PAID FOR WAGE DETERMINATION INCREASES IN OPTIONS AND EXTENSIONS UNDER THE SERVICE CONTRACT ACT

Contractors know that most contracts for services are subject to the Service Contract Act, 41 U.S.C. § 351(a) (the “SCA”). The SCA was designed to protect wages and fringe benefits of service workers employed on U.S. Government contracts. It directs the Department of Labor (“DOL”) to issue minimum wage orders applicable to fixed-price services contracts, called “Wage Determinations,” which are developed to reflect “prevailing wages.” Through Federal Acquisition Regulation (“FAR”)-mandated contract clauses, contractors are forbidden from paying less than the wages and fringe benefits contained in a Wage Determination. Furthermore, the FAR clauses permit a contractor to recover increases in wages and benefits mandated by future Wage Determinations when they impact on options and extensions. A recent Board case demonstrates the entitlement. Hallmark-Phoenix 3, LLC, … Continue reading

IS THE ENTIRE FEDERAL ACQUISITION REGULATION (FAR) INCORPORATED IN YOUR GOVERNMENT CONTRACT?

The Federal Acquisition Regulation (“FAR”) is found in Title 48 of the Code of Federal Regulations. It consists of 37 Chapters (Chapter 1, some 2,000+ pages, which applies to all agencies, and then various agency supplements plus the Cost Accounting Standards). In all, the FAR is thousands of pages long. Are all of the relevant parts of the FAR incorporated into your government contract? The simple answer is “NO,” but first a bit of background. A recent Court of Federal Claims Case, James M. Fogg Farms, Inc. v. United States, No. 17-188C (Fed. Cl. Sept. 27, 2017), considered a similar issue. The question in Fogg was whether federal statutes (specifically, an Agriculture Conservation Program in the Farm Bill, title 16 of the U.S. Code) was … Continue reading

SOLICITATIONS FOR REQUIREMENTS CONTRACT MUST INCLUDE REALISTIC ESTIMATED QUANTITIES, NOT JUST HISTORICAL DATA

In a recent decision overruling the Court of Federal Claims, the Federal Circuit upheld a contractor’s claim of negligent estimates in a requirements contract, where the agency provided historical data in the solicitation, but failed to include information on anticipated troop movements and a surge of equipment and material that would become part of the contract as the units departed. Agility Defense & Gov’t Services, Inc. v. United States, 847 F.3d 1345 (Fed. Cir. 2017). REQUIREMENTS CONTRACTS A requirements contract provides for filling all of the purchase requirements of designated Government activities for supplies or services during a specified contract period from one contractor, with deliveries or performance to be scheduled by placing orders with the contractor. Federal Acquisition Regulation (“FAR”) 16.503(a). The FAR states … Continue reading

DISMISSAL OF AN INCOMPLETE (IMPROPER) CLAIM OR APPEAL

A recent Armed Services Board of Contract Appeals (“ASBCA”) decision is a strong reminder that contractors must submit complete and proper claims, or they will be dismissed by either the Contracting Officer or a board or court, if appealed to one of those forums. Andrews Contracting Services, LLC, ASBCA No. 60808 (May 22, 2017). Andrews submitted to the Contracting Officer a “Request for Equitable Adjustment” for $292,797.51 in connection with its contract. The REA contained a certification required by the Defense Federal Acquisition Regulation Supplement (“DFARS”) 252.243-7702 where the contractor’s President certified that “the request is made in good faith and that the supporting data are accurate and complete to the best of my knowledge and belief.” The Contracting Officer denied the REA three months … Continue reading