ORAL ADVICE CANNOT AMEND A SOLICITATION

This blog has frequently frowned on a government contractor taking oral advice from any government official, even a contracting officer. For the most part, unless confronted with an emergency or time sensitive situation, contractors should insist that contracting officers place advice or direction in writing, modifying a solicitation or an actual contract as necessary. (Even if a contractor accepts oral advice in an emergency, it should email or otherwise immediately document to the agency the contracting officer’s emergency advice or direction.) This is an elementary protective tactic for contractors. Recently, in Technology and Telcom. Consultants, Inc., B-415029, Oct. 26, 2017, the Government Accountability Office (“GAO”) denied a protest where a contractor relied on oral advice on how to interpret a solicitation that was given during … Continue reading

HOW TO SIGN YOUR CLAIM AND CERTIFICATION

The Contract Disputes Act of 1978 (“CDA”) contains a few simple requirements for claims over $100,000, including certification. Yet to this day contractors have consistently violated the certification requirements and, as a result, had their claims dismissed by the Boards and Courts. This happened most recently in NileCo Gen’l Contracting, LLC, ASBCA No. 60912, Sept. 22, 2017. It seems as if a technology-crazed world sometimes refuses to use the most low-tech machine of all—the pen—because the pen is just not electronically convenient. Hopefully, government contractors will read this blog. The CDA states that each claim for more than $100,000 must be certified to state that: The claim is made in good faith; The supporting data are accurate and complete to the best of the contractor’s … 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

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

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

SEQUESTRATION: A DOZEN WAYS THE GOVERNMENT CAN REDUCE OR ELIMINATE YOUR CONTRACT

As of the last week in August 2017, there is no agreement in Washington, DC on a great budgetary trifecta: (1) a needed increase in the debt ceiling, which now stands at $19.86 trillion; (2) a budget for fiscal year 2018–the fiscal year that begins on October 1, 2017, without which the government will shut down; and (3) possible “sequestration,” or the automatic cancellation (cut) of agency budgets because of spending that exceeds statutory caps. Indeed, the Office of Management and Budget (“OMB”) Sequestration Report for Fiscal Year 2018, issued on August 18, 2017, states that “if the 2018 discretionary caps remain unchanged, [], if enacted, the actions to date by the House of Representatives would result in a sequestration of $72.4 billion in the … Continue reading

FOUR REASONS WHY SPECIFICATIONS TAKE PRECEDENCE OVER DRAWINGS

Most construction contractors understand that Federal Acquisition Regulation (“FAR”) 52.236-21, Specifications and Drawings for Construction, specifically states that “in case of difference between drawings and specifications, the specifications shall govern.” This clause is mandatory for use in fixed-price construction contracts over $150,000. FAR 36.521. A recent construction contract not only included FAR 52.236-21, but three other clauses that similarly stated that the specifications took precedence over the drawings. ATI TACOSE S.C.a R.L. (“TACOSE”), ASBCA Nos 59157, 59200, January 4, 2017. These clauses related to two claims for constructive changes by the government. The Navy awarded a contract to TACOSE to design and build a dormitory at Aviano Air Base in Italy. The solicitation did not include a finished design, but rather, a package setting forth … Continue reading

ANOTHER SAD STORY OF MISPLACED RELIANCE ON A CONTRACT SPECIALIST AND IMPROPER EXERCISE OF OPTIONS

This blog has frequently discussed cases supporting the strong principle that the federal government has given the authority to enter into and modify contracts to only a limited class of government employees: namely, contracting officers. Federal Acquisition Regulation (“FAR”) 1.601(a). This section grants to agency heads the authority to contract for supplies and services and requires that “[c]ontracts may be entered into and signed on behalf of the Government only by contracting officers”. Also note that FAR 43.102 states that “Only contracting officers acting within the scope of their authority are empowered to execute contract modifications on behalf of the Government.” Other Government personnel are prohibited from executing contract modifications. Id. See also Winter v. Cath-dr/Balti Joint Venture, 497 F.3d 1339, 1344 (Fed. Cir. 2007). … Continue reading