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

AGENCIES CANNOT PRO-RATE INVOICES UNLESS THE CONTRACT SO STATES

Have you ever had a situation where a Government Agency advised you that it would reduce or pro-rate your monthly services invoice for days not worked, but your company objected and said “that procedure is not in our contract?” The Agency response is frequently: “so what, we’re doing it anyway, you didn’t work those days.” That’s exactly what happened to Amaratek during last year’s Government shutdown. The Armed Services Board of Contract Appeals ruled the Army’s invoice adjustment to be improper, and allowed Amaratek’s claim for a full monthly invoice amount even though only six days were worked. Amaratek, ASBCA No. 59149, 15-1 BCA ¶35808. In Amaratek, the Army awarded the company a contract for laboratory services at the Yuma Proving Ground in Arizona. There … Continue reading

The PCI Network – Ethics in Government Contracting

Understanding the difference between right and wrong isn’t always as easy as you may think. In the Federal Contracting industry, there are important ethical distinctions that can create confusion if you don’t know where to look. Join Fred Geldon, a PCI Director and Faculty, as he explains the importance of ethics in Government Contracting and how to minimize the confusion.

UNREASONABLE POST-PERFORMANCE ACTIONS BY THE GOVERNMENT

In two recent Armed Services Board of Contract Appeals (“ASBCA”) cases, the Board sustained the appeals and found the agency’s post-performance actions to be unreasonable. In one case, Avant Assessment, LLC, ASBCA No. 58866, Sept. 28, 2016, the Army terminated a contract after performance for failing to deliver the “requisite number” of test items, even though the delivery of these items had been deleted by the language of the contract itself. In the second case, HCS, Inc., ASBCA No. 60533, Sept. 20, 2016, the Navy unilaterally reduced the price of the contract by more than 50 percent by deleting work from the contract after that work had been performed. In Avant Assessment, the contract was required to deliver foreign language test items. During performance, a … Continue reading

MUST YOUR CLAIM BE CERTIFIED BY THE PERSON WHO SIGNED YOUR CONTRACT?

The Civilian Board of Contract Appeals (“CBCA”) recently set forth the requirements for a person who signs a contractor’s certification of its claim. AMX Veterans Spec. Servs., LLC v. Dept of Veterans Affairs, CBCA 5180, August 9, 2016. As readers of this blog know, any claim over $100,000 must be certified stating that: • the claim is made in good faith, • the supporting data are accurate and complete to the best of the contractor’s knowledge and belief • the amount requested accurately reflects the amount the government owes • the certifier in authorized to certify the claim on behalf of the contractor. 41 U.S.C. §7103(b). The Federal Acquisition Regulation (“FAR”) states that for requests over $100,000, whatever the contractor submits “is not a claim…until … Continue reading

WILL AN EMPLOYEE STRIKE EXCUSE A DEFAULT? WHAT IS A STRIKE?

The fixed price default clause at Federal Acquisition Regulation (“FAR”) 52.249-8(c) as well as the “excusable delays” clause in commercial item contracts at FAR 52.212-4(f) provide that a contractor shall not be liable for default in the event of “strikes.” The Civilian Board of Contract Appeals (“CBCA”) recently considered how a “strike” should be defined, and whether a default should be excused in the event of a strike. Asheville Jet Charter and Mgt., Inc., v. Dept of the Interior, CBCA 4079, May 19, 2016. Here is what the two default clauses say about strikes. (Excerpts)(emphasis added):—– FAR 52.249-8 (Default (Fixed Price Supply and Service). [T]he Contractor shall not be liable for any excess costs if the failure to perform the contract arises from causes beyond … Continue reading