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

ARE YOU ENTITLED TO AN EQUITABLE ADJUSTMENT?

It is not possible to delineate all situations where a contractor is entitled to an equitable adjustment in price and/or time to perform the contract. However, under the Federal Acquisition Regulation (“FAR”), contractors are eligible for numerous different equitable adjustments arising out of the performance of their contracts and the actions of the government. Typically, a contractor can receive an equitable adjustment for a constructive change, delay or other government caused increase in its costs. It is generally advisable to assert your right to the various equitable adjustments permitted by the FAR. You must comply strictly with the equitable adjustment requirements in the FAR and in your contract. What is an equitable adjustment: Although the FAR defines a claim (see below), it does not define … Continue reading

BEWARE OF GOVERNMENT “BEST EFFORTS” ON OPTIONS

A previous blog, “The Government Controls the Options,” makes clear that contractors cannot demand that the Government exercise an option in the contract, and that the Government has the sole right to exercise or not exercise the option. Two recent cases demonstrate that the contractor will also lose a claim where the government fails to exercise an option, even though both contracts required the government to make “best efforts to obtain funds” for the options. In Mach I AREP Carlyle Center LLC, ASBCA No. 59821, June 1, 2016, Mach I entered into a lease with the Corps of Engineers for office space in the Northern Virginia suburbs of Washington, DC. The lease contained a base year, and nine separate option years, and the Corps was obligated “to … Continue reading

THE GOVERNMENT CONTROLS THE OPTIONS

Virtually all government contract options (for more quantities of goods, or for an extension of services), are generally priced unilateral options which the Government may exercise or not exercise at the Government’s discretion. When it does exercise an option, the Government must follow the requirements in the option clause, but contractors may not successfully complain about the failure of the Government to exercise that option. JRS Management v. Dept of Justice, CBCA 3288 (May 28, 2014) is an excellent example of the Government’s discretion. The JRS contract was for culinary arts instructor services to the Department of Justice for a base year running through Aug. 7, 2012, with four option years. The contract specified certain experience and qualification requirements for each of the instructors. The … Continue reading

CAN YOU SELL A GOVERNMENT CONTRACT: ASSIGNMENT, NOVATION, CHANGE OF NAME AND ASSIGNMENT OF CLAIMS

Contractors frequently ask if they can sell or transfer (assign) their government contract to another company.  The sale or assignment of a purely commercial contract is very common and well recognized at law. But for a Government contract, there are special rules.  Although a transfer can be made through a process known as “novation,” the contract can be annulled if the rules are not carefully followed. Commercial Contracts May Generally Be Sold: Generally, commercial contracts can be sold or transferred to a third party.  Indeed, Article 2-210 of the Uniform Commercial Code (“UCC”) explicitly permits this, by stating: § 2-210. Delegation of Performance; Assignment of Rights. (1) A party may perform his duty through a delegate unless otherwise agreed []. (2) Unless otherwise agreed all … Continue reading

THE SALES ARTICLE OF THE UNIFORM COMMERCIAL CODE APPLIES TO GOVERNMENT CONTRACTS

The Uniform Commercial Code (“UCC”) was developed between 1942 and 1952 by the National Conference of Commissioners on Uniform State Law and the American Law Institute, with assistance from lawyers, judges, law professors, and businessmen, in order to simplify and clarify the law and make it uniform.  It has been adopted by all 50 states and the District of Columbia (only in part in Louisiana).  Of particular importance to private contracts throughout the United States is UCC Article 2, Sales. Even though the Federal Acquisition Regulation (“FAR”) controls government contracts, “ the Uniform Commercial Code provides useful guidance in applying general contract principles. Hughes Commc’ns Galaxy, Inc. v. United States, 271 F.3d 1060, 1066 (Fed. Cir. 2001).  And, the Federal Circuit has said that the … Continue reading

WHEN IS A CHANGED CLAIM A “NEW” CLAIM?

In order to bring an appeal of a claim before the Court of Federal Claims or a Board of Contract Appeals, that claim must be presented to the contracting officer for decision.  The claim must be specific enough to give the officer notice of the basis of the claim and allow him/her to make an informed judgment about it. Typically the contracting officer will issue a final decision on a claim, but even if he or she does not, the claim will be “deemed denied” by law, and the contractor may appeal to a Board or the Court.  The Contract Disputes Act requires that a claim that is appealed be the same as the claim presented to the contracting officer.  In Affiliated Const. Group, Inc. … Continue reading