February 2007

One of the byproducts of the recent use of negotiated procurements under FAR, Part 15, has been the concern, on the part of contractors, that the submission of claims will be a negative factor during the evaluation process on a Request for Proposals.  While we can certainly understand that a contractor who has a history of filing frivolous claims might deserve to be downgraded, we see no valid reason for the government to assign a lower rating to a contractor who has filed meritorious, or good faith, claims in the past.

On February 12, 2006, a provision was added to the Defense Federal Acquisition Regulation Supplement (DFARS) dealing with the review of claims that we find very disturbing.  Under DFARS Subpart 233.2, Disputes and Appeals, Paragraph 233.10, “Contracting Officer’s Authority,” there is a reference to a new “PGI” (Procedures. Guidance and Information). The new guidance states that “When it would be helpful in reviewing the current claim, the contracting officer should get information on claims previously filed by the contractor.  Such information may provide a historical perspective of the nature and accuracy of the claims submitted by the contractor and how they were settled.  Potential sources for the information include the contracting activity’s office of legal counsel, other contracting activities, and the Defense Contract Audit Agency.”

We believe that each claim should stand on its own merits.  Each claim is different and is the result of a different contract, a different set of facts, and is ultimately decided by a different set of legal principles.  In addition, the Contract Disputes Act of 1978 gives contractors the right to file claims.  It seems to us that “guidance” that could potentially penalize contractors for filing claims is most inappropriate.Continue Reading New DFARS Provision Has a "Chilling Effect" on Claims

We have recently presented a series of very well-received and  well attended seminars on “The New World of Federal Government Construction Contracting."  It is evident from the questions raised by many of the attendees that contractors are concerned about the decline in contracting opportunities as the federal government shifts from sealed bidding to the…

A recent decision by the Court of Federal Claims, AAB Joint Venture v. United States, (January 26, 2007), illustrates some of the subtleties of the Contract Disputes Act of 1978.  The contractor was awarded a design-build contract for a military storage complex.  The government provided a geotechnical report in the solicitation for the contractor’s use in preparing its proposal and subsequent design.  The contractor discovered, during construction, that the actual subsurface conditions differed materially from those represented in the government’s geotechnical report. Specifically, the report stated that the material was “limy dolomite rock, mostly massive and hard.”  However, the contractor discovered that there was less hard rock and more expansive, clayey material.  The latter material adversely affected the contractor’s plan to use shorter piles and spread footings for the building foundations.

The contractor submitted a certified claim to the contracting officer for the impact of the differing site conditions on the length of piles required for the perimeter of the structures, contending that the softer material required longer pile lengths.  When the government failed to issue a contracting officer’s decision, the contractor appealed to the Court of Federal Claims on the basis of a deemed denial of its claim. 

In its complaint, the contractor included a claim for the removal of unsuitable subsurface material in the footprint of the structures and requested a $412,000 equitable adjustment. The government objected to that part of the claim, arguing that the claim had not been presented to the contracting officer and, consequently, had not been certified. The government sought dismissal of the unsuitable material claim because the Court lacks jurisdiction to hear a claim that has not been presented to the contracting officer and certified.
Continue Reading Court of Federal Claims Rules That A Differing Site Conditions Claim Must Be Precise

In an a press release issued by Construction News, a publication of the Associated General Contractors of America (AGC), it was reported that the U.S. Environmental Protection Agency (EPA) and the AGC had both filed an appeal with the U.S. Court of Appeals for the Ninth Circuit to contest a recent California district court ruling that requires the EPA to issue an “effluent limitation guideline” (ELG) for the “Construction and Development” (C&D) industry.

Such an ELG would set uniform, nationwide limits on the sediment that stormwater can lawfully discharge from construction sites. After years of analysis and outreach, EPA concluded that additional rules are unnecessary, given the evolution of the existing stormwater program.

“EPA recognizes that there is no ‘one-size-fits-all’ approach to stormwater runoff,” said AGC CEO Stephen E. Sandherr. “The better way to protect the environment is to allow state and local authorities to tailor the details of their construction runoff programs to state and local conditions, and not to impose a rigid and inflexible federal standard.” Continue Reading AGC Appeals Ruling that EPA Must Set Limits on Sediment in Construction Runoff