Adding Value to the Company: Moving to Dismiss Claims Under the Contract Disputes Act for Statute of Limitation Violations

To say that there is a crisis surrounding the closing of government contracts, especially large cost-type contracts held by large government contractors, would certainly not be an understatement. [i]  Closing a contract essentially requires verification that the goods or services have been provided and that final payment has been made to the contractor. Audits are the tools the government uses to support contract closeouts.  However, the government is seemingly taking forever to perform various audits of government contracts.  To illustrate, the Defense Contract Audit Agency, the audit arm of the Department of Defense, had a backlog of 25,000 incurred cost audits at the end of Fiscal Year 2011, some dating as far back as 1996. GAO, Defense Contracting:  DOD Initiative to Address Audit Backlog Shows … Continue reading

Coast Guard’s Fat Requirements for Dry Suits All Wet Says GAO

The Coast Guard issued a delivery order under a GSA Schedule contract to U.S.I.A. Underwater Industrial Apparel (“USIA”) for 777 underwater dry suits. USIA delivered the first 100 suits with an invoice for $59,000. The Coast Guard tested these suits and found they did not meet the specifications for an adjustable Velcro neck. After discussing the problem, the parties signed a bilateral modification “to change the delivery date, change the specification, and add a first article requirement.” The Coast Guard did not return the 100 suits to USIA. USIA then delivered 120 more suits with the new adjustable neckline. The Coast Guard again tested the suits and determined that 32.5% of the suits leaked. The Coast Guard then issued a cure notice for the delivery … Continue reading

Allowable Legal Costs

By Darrell Oyer, Darrell J. Oyer & Co.:  The U.S. Court of Appeals for the Federal Circuit has affirmed a Civilian Board of Contract Appeals ruling that Boeing Co. (successor in interest to Rockwell International Corp) could recover costs related to its defense of a False Claims Act (FCA) lawsuit [Chu v. Boeing Co., Fed. Cir., No. 2011-1304, -1317] In 1989, a relator brought an FCA lawsuit in U.S. District Court alleging that Rockwell had false claims and statements regarding certain environmental matters.  A jury awarded the plaintiff a $4.1 million judgment that a Circuit Court affirmed. However, the Supreme Court found that the District Court lacked jurisdiction to enter judgment in favor of the relator because the relator was not an original source under … Continue reading