AFTER THE AFTERTHOUGHTS: REAs VERSUS CLAIMS

On November 14, 2017, a PCI Consultant posted a blog article about Requests for Equitable Adjustments (“REA”) versus claims. It seems to me that the original discussion and the blog overlooked an important problem in contract administration today—the failure of contracting officers (“CO”) to do their duty to review and engage in negotiations on both REAs and claims. The blog said: 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. Question: I would assert that if examined just from the perspective of reading case law on the issue, the difference between an … Continue reading

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

Afterthoughts: Evaluating Cost & Price Realism

By Nicole R. Best On February 23, 2017, Professor Ralph Nash and Tim Sullivan hosted a virtual classroom on the topic of Evaluating Cost and Price Realism. Following the virtual classroom, I interviewed Professor Nash to ask questions related to the discussion during the training. Why does the government, as a buyer, care about cost and price realism? Those are two different things. Cost realism is important because when we are running a competition for cost reimbursement contracts, we don’t want companies to win by proposing an estimate that is unreasonably low. If the government awards at an estimate that is low and the contractor runs out of money on the contract but hasn’t finished the job, either (1) you won’t be able get money … Continue reading

Afterthoughts: Discussions versus Clarifications

By Nicole R. Best On March 30, 2017, Professor Ralph Nash and Tim Sullivan hosted a virtual classroom on the topic of Clarifications versus Discussions during negotiated procurements. Following the virtual classroom, I interviewed Professor Nash to ask questions related to the discussion during the training. To some extent a theme of the webinar was a discussion of the narrowing scope of what constitutes a clarification during the negotiated procurement source selection process. What exchange currently constitutes a clarification and, as a practical matter, do you think clarifications still have a significant and useful role in the negotiated procurement process? First, the narrowness of the definition is to some extent in the vagueness of the language. If you look at FAR 15.306(a) it says “Clarifications … Continue reading

AFTERTHOUGHTS: PROPOSAL EVALUATIONS OF COST AND NON-COST FACTORS

Following each Professor’s Virtual class, we interview Professor Ralph Nash to get his thoughts on the topic following discussion.  On February 24th, 2016, Professor Ralph Nash and Tim Sullivan discussed proposal evaluations of cost and non-cost factors.   Background    Competitive procurements pursuant to FAR Part 15 gained notoriety and use after the enactment of the Competition in Contracting Act (“CICA”) in 1984.  Under competitively negotiated contract formation techniques, the Government prepares a solicitation, which contains a statement of work and contract terms, and requests potential offerors to propose a price and submit information on other designated evaluation factors.  Once proposals are submitted, the Government must evaluate the proposals and choose an awardee to perform to contract. Use of these competitive procedures raises concerns about … Continue reading

The Government’s Duty of Good Faith and Fair Dealing

The long-standing principle that the federal government had the same implied duty of good faith and fair dealing as any commercial buyer was put in jeopardy by a 2010 decision of the U.S. Court of Appeals for the Federal Circuit, Precision Pine & Timber, Inc. v. U.S., 596 F.3d 817 (Fed. Cir. 2010). There a panel of the court adopted a narrow rule seemingly limiting application of the principle to situations where a government action was “specifically targeted” at the contractor or had the effect of taking away one of the benefits that had been promised to the contractor. Although the decision concerned a timber sales contract not a procurement contract, when I wrote it up in the May 2010 Nash & Cibinic Report (24 … Continue reading

Afterthoughts: Contract Interpretation

If you are performing a contract and the terms of the contract become an issue, what are the key things that you should be concerned about? Is it different if you are a government procurement official or private contractor? Well I think the concerns are basically the same whichever party you are a part of. If you are having a disagreement, the parties need to step back and look at the positions they are each taking and ask themselves, if a judge read these words – without any help about how we performed this contract before or after we signed it – what would he or she objectively think the words meant. What is the plain meaning of these words? To do this sort of … Continue reading

Afterthoughts: Flowdown Clauses

What are the three most significant errors contractors make when dealing with flowdown clauses? 1) I think the first error is just having a blanket provision in the front;  a blanket clause that says wherever you see the term “Government” insert “prime contractor” and wherever you see the term “contractor” insert “subcontractor”  because a number of the clauses just don’t work well that way. 2) Incorrect drafting or not complete enough drafting of a disputes provision that gives both parties the opportunity to resolve disputes in a reasonably efficient way.   This entails drafting  two provisions.  One provision for when a subcontractor claims that the government has caused it to incur additional expenses and will need  the prime to sponsor the claim.  The other provision is for … Continue reading

Afterthoughts: Good Faith & Fair Dealing

What responsibilities are included in the duty of good faith and fair dealing/ what should be included? The Restatement of Contracts lists some examples but without trying to go into the specifics of that list, I always said that the duty of good faith and fair dealing was at the center a requirement that the two parties would reasonably respond to each other’s problems. If you go back to the Civil War and look at the case law, we talked about the duty of cooperation and the duty not to hinder contractor’s performance. Those were the original duties that our legal background is full of. When we started to talk about the broader duty of good faith and fair dealing, these two duties, the duty … Continue reading